Document:

Unassociated Document

     

    EXECUTION
COPY

     

     

    
      NOTE
PURCHASE AGREEMENT

       

       

      This Note Purchase Agreement
(this “Agreement”), dated as
of the Subscription Acceptance Date (as defined herein), is by and among
U.S. Concrete, Inc., a Delaware corporation with its principal executive offices
currently located at 2925 Briarpark, Suite 1050, Houston, TX 77042 (the “Company”), the direct
and indirect domestic subsidiaries of the Company signatory hereto
(individually, a “Guarantor,” and
collectively, the “Guarantors;” the
Guarantors and the Company are sometimes referred to herein collectively as the
“Issuer
Parties” and each, an “Issuer Party”) and
the investors listed on the Schedule of Subscription Parties attached as Annex I (the “Subscription
Parties”) that have properly completed and returned a Subscription
Certificate (a “Subscription
Certificate”) in the form attached as Exhibit A hereto and
each of the investors set forth on Annex II (the “Put Option Parties,”
and together with the Subscription Parties, the “Buyers”) party to
that certain Support Agreement (as defined below).  The Company, the
Buyers and the Guarantors are sometimes referred to herein collectively as the
“Parties” and
each of them, individually, as a “Party.”

       

      Whereas:

       

      A.           The
Company and its affiliated debtors and debtors-in-possession (collectively, the
“Debtors”),
each the subject of a voluntary case (the “Cases”) under chapter
11 of title 11 of the United States Code (the “Bankruptcy Code”) in
the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”)
will be reorganized pursuant to a joint plan of reorganization (the “Plan”).

       

      B.           The
Company and each Buyer are entering into and delivering this Agreement in
reliance upon the exemption from securities registration afforded by Section
4(2) of the Securities Act of 1933, as amended (the “Securities Act”), and
Rule 506 of Regulation D (“Regulation D”) as
promulgated by the U.S. Securities and Exchange Commission (the “SEC”) under the
Securities Act.

       

      C.           The
Company has authorized a new series of convertible secured notes of the Company
titled 9.5% Convertible Secured Notes due 2015 (the “Convertible Notes”)
convertible into shares of the common stock of the Company, par value $0.001 per
share (the “Common
Stock”; and the shares of Common Stock into which the Convertible Notes
are convertible are sometimes referred to herein as the “Conversion Shares”),
in connection with the Plan. The Convertible Notes will be issued in accordance
with the terms of that certain indenture (as may be amended, modified or
supplemented from time to time, the “Convertible Notes
Indenture”) to be entered into among the Company, the Guarantors, U.S.
Bank National Association, as trustee (in such capacity, the “Trustee”) and
collateral agent (in such capacity, the “Collateral
Agent”).

       

      D.           Each
Guarantor will fully and unconditionally guarantee the Convertible Notes,
pursuant to the terms of the Convertible Notes Indenture, as the purchase of the
Convertible Notes by the Buyers will benefit the Company and Guarantors, both
individually and as a whole.  The guarantees to be entered into by the
Guarantors pursuant to the Convertible Notes Indenture are referred to herein as
the “Guarantees,” and the
Convertible Notes, the Conversion Shares and the Guarantees are sometimes
referred to herein collectively as the “Securities.”

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      E.           The
Company and the Put Option Parties have entered into (i) a letter agreement
dated July 20, 2010 (the “Purchaser Letter”)
with respect to the initial terms and conditions of the Convertible Notes and
(ii) an agreement dated August 16, 2010 (the “Support Agreement”)
pursuant to which each such Put Option Party has agreed to, among other things,
purchase (or cause its designated affiliates to purchase) up to one-third of the
Aggregate Principal Amount (as defined below) upon the exercise by the Company
of the Put Option (as defined therein).

       

      F.           The
Issuer Parties have prepared an Offering Supplement to the Disclosure Statement,
dated as of August 16, 2010 (including all documents incorporated by reference
therein, the “Offering
Memorandum”), with respect to the offering of the Securities (the “Subscription Offer”
and, together with the transactions contemplated hereby and by the Support
Agreement, the “Transactions”).

       

      G.           Each
Buyer wishes to purchase, and the Company wishes to sell, upon and subject to
the terms and conditions set forth in this Agreement, the Subscription Amount
(as such term is defined in the Offering Memorandum) of the Securities. The
Subscription Amount of any Buyer shall not be greater than its pro rata portion
of the Convertible Notes, although the Put Option Parties may be required to
purchase additional Securities in accordance with terms of the Support
Agreement.  The aggregate principal amount of the Securities to be
issued in the Subscription Offer shall be $55,000,000 (the “Aggregate Principal
Amount”).

       

      H.           Each
Buyer, by virtue of the execution and delivery of its Subscription Certificate
by such Buyer and its dealer, broker or other nominee to the Subscription Agent
(as defined below) by the Subscription Offer Expiration Time, will, upon the
Company’s acceptance of such Subscription Certificate, become a party to this
Agreement and the Registration Rights Agreement, substantially in the form
attached hereto as Exhibit B (the “Registration Rights
Agreement”), pursuant to which the Issuer Parties will agree to file with
the SEC, under the circumstances set forth therein, one or more shelf
registration statements pursuant to Rule 415 of the Securities Act relating to
the sale by certain holders of the Convertible Notes and Conversion
Shares.

       

      I.           Concurrently
with the closing of the purchase and sale of the Securities hereunder, the
Issuer Parties will enter into a revolving credit facility among the Company,
certain affiliates thereof, JPMorgan Chase Bank, N.A. as administrative agent
(“Administrative
Agent”) and the lenders party thereto and any related documents (the
“Revolving
Facility”).

       

      J.           The
Issuer Parties will secure their obligations under the Securities by (i)
first-priority liens on substantially all of the assets of the Company and each
of the Guarantors, including material owned real property and material owned
quarries and related assets, subject to permitted liens (including a
second-priority lien in favor of the collateral agent under the Revolving
Facility) and certain exceptions as described in the Convertible Notes Security
Agreement (the “First
Lien Collateral”); and (ii) a second-priority lien on the assets of the
Company and the Guarantors securing the Revolving Facility on a first-priority
basis, subject to permitted liens and certain exceptions, as described in the
Convertible Notes Security Agreement (the “Second Lien
Collateral,” and together with the First Lien Collateral, the “Collateral”).  In
connection with the Transactions, (a) the Issuer Parties and the Collateral
Agent will enter into the Convertible Notes Security Agreement to be dated as of
the Closing Date (the “Convertible Notes Security
Agreement”), providing for, among other things, the grant of a security
interest in the Collateral as security for the Issuer Parties’ obligations under
the Securities and other documents and instruments (including, for the avoidance
of doubt, mortgages) evidencing or creating or purporting to create a security
interest in favor of the Trustee and the Collateral Agent (the “Other Security
Documents”) and, together with the Convertible Notes Security Agreement,
the “Security
Documents”) and (b) the Administrative Agent under the Revolving Facility
and the Collateral Agent will enter into an Intercreditor Agreement to be dated
the Closing Date, which Intercreditor Agreement shall be acknowledged by the
Company (the “Intercreditor
Agreement”).

       

      
        
          
          

        

        
          -2-

          
            

          

        

        
          
          

        

         

      

      K.           This
Agreement, the Convertible Notes, the Guarantees, the Convertible Notes
Indenture, the Registration Rights Agreement, the Security Documents, the
Support Agreement, the Intercreditor Agreement, and the Subscription
Certificates as each of them may be amended, modified or supplemented from time
to time, are sometimes referred to herein collectively as the “Transaction
Documents” and each, a “Transaction
Document.”

       

      L.           Capitalized
terms used but not defined herein shall have the meaning given to such terms in
the Offering Supplement.

       

      NOW, THEREFORE, in
consideration of the mutual covenants, agreements, representations and
warranties contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and intending to be
legally bound, the Parties hereby agree as follows:

       

      
        	
              	
                1. 

              	
                PURCHASE
      AND SALE OF THE
SECURITIES

              

      

       

      (a)           Purchase and Sale of the
Securities at Closing.  Subject to the satisfaction (or waiver,
as provided herein) of the conditions set forth in Section 5 and
Section 6
below, on the Closing Date (as defined below), the Company agrees to issue and
sell to each Buyer and each Buyer severally, but not jointly, agrees to purchase
from the Company, the respective aggregate principal amount of Convertible Notes
set forth in the Subscription Certificate executed by such Buyer (subject to
reduction as described in the Offering Memorandum); provided that, to the
extent the Company does not receive Subscription Certificates providing for the
purchase of at least the Aggregate Principal Amount on or prior to the
Subscription Offer Expiration Time, each of the Put Option Parties also agrees
to purchase its respective Put Percentage (as defined in the Support Agreement)
of Convertible Notes (subject to the provisions of the Support
Agreement).  The purchase and sale of the Securities on the terms and
subject to the conditions set forth in this Agreement is referred to herein as
the “Closing.”  The
Guarantors agree to execute, and deliver to the Trustee, the Guarantees on
account of the Convertible Notes issued and sold on the Closing
Date.

       

      (b)           Purchase
Price.  Each Buyer shall pay $1,000 for each $1,000 of
principal amount of the Securities to be purchased (the “Purchase Price”) by
such Buyer at the Closing.

       

      
        
          
          

        

        
          -3-

          
            

          

        

        
          
          

        

         

      

      (c)           Closing
Date.  The Closing shall take place at the offices of
Kirkland & Ellis LLP, 300 N. LaSalle, Chicago, Illinois 60654, at 9:00
a.m., Chicago time, on the date (the “Closing Date”) set
forth on the notice (the “Closing Date Notice”)
delivered by the Company to Wells Fargo Bank, National Association, as
subscription agent for the Subscription Offer (the “Subscription Agent”)
and the Put Option Parties setting forth the satisfaction or waiver of all
closing conditions set forth in this Agreement (other than those that by their
terms will be satisfied on the Closing Date).  The Closing Date shall
occur on the effective date (the “Effective Date”) of
the Plan and shall occur no earlier than the second business day after the
Company’s delivery of the Closing Date Notice.

       

      (d)           Form of
Payment.  Upon the satisfaction (or waiver, as provided herein)
of the conditions set forth in Section 5 and
Section 6
below, the Securities shall be delivered by the Issuer Parties to the Buyers
through the facilities of The Depository Trust Company (“DTC”) against payment
of the Purchase Price therefor.  Each Buyer (other than the Put Option
Parties) shall deliver its Subscription Payment to its broker or nominee, who
shall deliver such payment to Wells Fargo Bank, National Association, as escrow
agent for the Subscription Offer (the “Escrow Agent”) not
later than one business day following the Subscription Acceptance Date in
accordance with the terms of its Subscription Certificate and the terms of the
Subscription Offer described in the Offering Memorandum.  Each Put
Option Party shall deliver its Subscription Payment and the applicable Put
Participation Amount (as defined in the Support Agreement) to the Escrow Agent
as soon as practicable after the Company’s delivery of the Put Election, in
accordance with the terms of the Support Agreement, but in no event later than
the business day immediately preceding the Closing Date.

       

      
        	
              	
                2. 

              	
                REPRESENTATIONS
      AND WARRANTIES OF THE BUYERS.

              

      

       

      Each
Buyer represents and warrants, on behalf of itself only and not with respect to
any other Parties, to the other Parties that the following statements are true,
correct and complete as of the date hereof:

       

      (a)           Organization;
Powers.  Such Buyer is duly organized, validly existing, and in
good standing under the laws of the jurisdiction of its organization or
formation, as applicable.  Such Buyer has all requisite power and
authority to enter into this Agreement and the Transaction Documents to which it
is a party, and to perform and comply with all of the terms, covenants, and
conditions to be performed and complied with by it hereunder and
thereunder.

       

      (b)           Authorization;
Enforceability.  The entry into and performance of this
Agreement and the Transaction Documents to which it is a party by it have been
duly authorized by all necessary actions on the part of such
Buyer.  This Agreement has been duly entered into and constitutes the
legal, valid, and binding obligation of such Buyer, enforceable against it in
accordance with its terms except as the enforceability of this Agreement may be
affected by bankruptcy, insolvency, or similar laws affecting creditors’ rights
generally, and by judicial discretion in the enforcement of equitable
remedies.

       

      (c)           No
Conflicts.  The execution, delivery and performance by such
Buyer of this Agreement and the Registration Rights Agreement and the
consummation by such Buyer of the transactions contemplated hereby and thereby
will not (i) result in a violation of the organizational documents of such Buyer
or (ii) conflict with, or constitute a default (or an event which with notice or
lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture or instrument to which such Buyer is a party, or (iii)
result in a violation of any law, rule, regulation, order, judgment or decree
(including federal and state securities laws) applicable to such Buyer, except
in the case of clauses (ii) and (iii) above, for such conflicts, defaults,
rights or violations which would not, individually or in the aggregate,
reasonably be expected to have a material adverse effect on the ability of such
Buyer to perform its obligations hereunder.

       

      
        
          
          

        

        
          -4-

          
            

          

        

        
          
          

        

         

      

      (d)           Ownership.  Such
Buyer is, as of the Record Date, (i) (A) the sole beneficial owner and/or the
investment advisor, authorized representative, or manager for the beneficial
owner of Existing Notes having the power to vote and dispose of the Existing
Notes indicated on such Buyer’s Subscription Certificate on behalf of such
beneficial owner; and (B) entitled (for its own account or for the account of
other persons or entities claiming through any of them) to all of the rights and
economic benefits of such Existing Notes; or (ii) otherwise entitled to act on
behalf of such Existing Notes and/or the beneficial owner or owners and/or
investment advisor or manager thereof.

       

      (e)           Accredited Investor
Status.  Such Buyer acknowledges that (i) it is either
(A) a “qualified institutional buyer” within the meaning of Rule 144A
promulgated by the SEC under the Securities Act or (B) an institutional
investor that is an “accredited investor,” within the meaning of Rule 501(a)(1),
(2), (3) and (7) promulgated by the SEC under the Securities Act, (ii) it is
acquiring the Securities to be issued to it hereunder for its own account, for
investment, and not with a view to or for sale in connection with any
distribution thereof in violation of the registration provisions of the
Securities Act or the rules and regulations promulgated thereunder and (iii) it
is aware that an investment in the Securities involves economic risk and that it
may lose its entire investment in the Securities. Such Buyer further
acknowledges that the Securities are “restricted securities” under the federal
securities laws, have not been registered under the Securities Act or any state
securities or “blue sky” laws and may not be offered or sold except pursuant to
an effective registration statement thereunder or an exemption from registration
under the Securities Act and applicable state securities laws.  Such
Buyer further acknowledges that it has adequate information concerning the
business and affairs of the Company to make an informed decision regarding the
purchase of Securities contemplated hereby and has independently and without
reliance upon the Company, or the Company’s advisors, and based upon such
information such Buyer has deemed appropriate, made its own analysis and
decision to enter into the Transaction Documents to which it is a party, except
that such Buyer has relied upon the representations, warranties, agreements and
covenants of the Issuer Parties contained in this Agreement and the information
provided in the Offering Memorandum. Such Buyer understands that nothing in the
Offering Memorandum, Transaction Documents or any other materials presented by
or on behalf of the Company or its subsidiaries to such Buyer in connection with
the purchase of the Securities constitutes legal, tax or investment
advice.  Such Buyer has sought such accounting, legal and tax advice
as it has considered necessary to make an informed investment decision with
respect to its acquisition of the Securities.

       

      (f)           Legend.  Such
Buyer understands that upon the original issuance thereof, and until such time
as the same is no longer required under applicable requirements of the
Securities Act or applicable state securities laws, the certificates or other
instruments representing the Convertible Notes and all certificates or other
instruments issued in exchange therefor or in substitution thereof, including
the Common Stock issued upon conversion of the Convertible Notes, shall bear the
legend(s) set forth in the Convertible Notes Indenture, and that the Company
will make a notation on its records and give instructions to the Trustee in
order to implement the restrictions on transfer of the Convertible Notes, set
forth and described therein.

       

      
        
          
          

        

        
          -5-

          
            

          

        

        
          
          

        

         

      

      (g)           General
Solicitation.  Such Buyer is not purchasing the Securities as a
result of any advertisement, article, notice or other communication regarding
the Securities published in any newspaper, magazine or similar media or
broadcast over television or radio or presented at any seminar or any other
general advertisement.

       

      (h)           Reliance on
Exemptions.  Such Buyer understands that the Securities are
being offered and sold to it in reliance on specific exemptions from the
registration requirements of United States federal and state securities laws and
that the Issuer Parties are relying in part upon the truth and accuracy of, and
such Buyer’s compliance with, the representations, warranties, agreements,
acknowledgments and understandings of such Buyer set forth herein in order to
determine the availability of such exemptions and the eligibility of such Buyer
to acquire the Securities.

       

      (i)           No Governmental
Review.  Such Buyer understands that no United States federal
or state agency or any other government or governmental agency has passed on or
made any recommendation or endorsement of the Securities or the fairness or
suitability of the investment in the Securities, nor have such authorities
passed upon or endorsed the merits of the offering of the
Securities.

       

      (j)           Residency.  For
purposes of U.S. securities laws, such Buyer is a resident of the jurisdiction
specified on such Buyer’s Eligibility Questionnaire, which it previously
submitted to the Subscription Agent in accordance with the terms of the Offering
Memorandum.

       

      
        	
              	
                3. 

              	
                REPRESENTATIONS
      AND WARRANTIES OF THE ISSUER PARTIES.

              

      

       

      The
Issuer Parties jointly and severally represent and warrant to each Buyer as set
forth below, except as has been previously disclosed in (i) the Offering
Memorandum or (ii) any report, schedule, form, statement or other document
required to be filed by the Company with the SEC pursuant to the reporting
requirements of the Securities Exchange Act of 1934, as amended, filed with the
SEC prior to the date of this Agreement:

       

      (a)           Organization;
Powers.  Such Issuer Party is duly organized, validly existing,
and in good standing under the laws of the jurisdiction of its organization or
formation, as applicable.  Such Issuer Party has all requisite power
and authority (i) to own, lease and operate its properties and to conduct its
business as described in the Offering Memorandum; (ii) to execute and
deliver this Agreement and the Transaction Documents to which it is a party and
(iii) to perform and comply with all of the terms, covenants, and conditions to
be performed and complied with by such Issuer Party hereunder and
thereunder.  Such Issuer Party is duly qualified to transact business
in each jurisdiction in which the nature of its business makes such
qualification necessary, except where the failure to be so qualified would not
impair or hinder the ability of such Issuer Party to perform its obligations
under this Agreement or the Transaction Documents to which it is a
party.

       

      
        
          
          

        

        
          -6-

          
            

          

        

        
          
          

        

         

      

      (b)           Authorization;
Enforceability.  The execution, delivery, and performance of
this Agreement and the other Transaction Documents by such Issuer Party have
been duly authorized by all necessary actions on the part of such Issuer
Party.  This Agreement and each other Transaction Document has been or
will be on the Closing Date, as applicable, duly executed and delivered by such
Issuer Party and constitutes or will constitute on the Closing Date, as
applicable, the legal, valid, and binding obligation of such Issuer Party,
enforceable against it in accordance with its terms except as the enforceability
of this Agreement may be affected by bankruptcy, insolvency, or similar laws
affecting creditors’ rights generally, and by judicial discretion in the
enforcement of equitable remedies.

       

      (c)           Government Approvals; No
Conflicts.  The execution and delivery by each Issuer Party of
this Agreement and the Transaction Documents and the performance by each Issuer
Party of its obligations under this Agreement and the Transaction Documents and
the consummation of the Transactions, including its issuance of the Convertible
Shares (with or without the giving of notice, the lapse of time, or both): (i)
subject to the approval of the Bankruptcy Court and approval of the Plan, do not
require the consent of any third party (including any federal, state or local
governmental authority, including any court or administrative or regulatory
agency (a “Governmental
Authority”); (ii) subject to the approval of the Bankruptcy Court and
approval of the Plan, will not conflict with any provision of such Issuer
Party’s certificate of incorporation, certificate of formation, bylaws,
operating agreement or other organizational documents; (iii) subject to the
approval of the Bankruptcy Court and approval of the Plan, will not violate,
result in a breach of, or contravene any applicable common law and any
applicable statute, ordinance, code, or other law, rule, regulation, order,
technical or other standard, requirement, or procedure enacted, adopted,
promulgated, or applied by any Governmental Authority, including the terms of
any license or permit and any applicable order, decree, or judgment that may
have been handed down, adopted, or imposed by any Governmental Authority, in
each case as in effect on the date of this Agreement applicable to such Issuer
Party (other than any filings required under federal or state securities laws to
be made by the Closing Date, or to the extent permitted by applicable laws,
thereafter); and (iv) except with respect to the revolving credit, term
loan and guarantee agreement, effective as of May 3, 2010 among the Company, the
Guarantors, JPMorgan Chase Bank and the lenders party thereto (the “DIP Facility”), will
not violate, conflict with, result in a material breach of any terms of,
constitute grounds for termination of, constitute a default under (nor has any
event occurred that, with notice or passage of time or both, would constitute a
default under), or result in the acceleration of any performance required by the
terms of, any mortgage, indenture, lease, contract, agreement, or similar
instrument to which such Issuer Party is a party or by which such Issuer Party
or its properties may be bound legally.

       

      (d)           Issuance of
Securities. The Securities, when issued, sold and delivered as provided
herein, will each be duly and validly issued, fully paid and nonassessable and
will be free of restrictions on transfer other than restrictions on transfer
under applicable state and federal securities laws and entitled to the benefits
provided by the Convertible Notes Indenture.  The Conversion Shares,
when issued, sold and delivered as provided herein, will be free and clear of
all liens, encumbrances, equities or claims and the Company will have reserved
an adequate amount of the Common Stock for issuance of Conversion Shares upon
conversion of the Convertible Notes as of the Closing.

       

      
        
          
          

        

        
          -7-

          
            

          

        

        
          
          

        

         

      

      (e)           Investment Company
Status.  Each of the Issuer Parties is not, and after giving
effect to the offering and sale of the Convertible Notes and the application of
the proceeds thereof, each of the Issuer Parties will not be, an “investment
company” as defined in, or subject to regulation under, the Investment Company
Act of 1940, as amended, and the rules and regulations of the SEC promulgated
thereunder.

       

      (f)           Margin
Regulations.  Neither the issuance, sale and delivery of the
Convertible Notes nor the application of the proceeds thereof by the Company
will result in a violation of Section 7 of the  Exchange Act,
Regulations T, U or X of the Board of Governors of the Federal Reserve System or
any other regulation of such Board of Governors.

       

      (g)           No General Solicitation or
Directed Selling Efforts.  None of the Company or any of its
affiliates (as defined in Rule 501(b) of Regulation D) or any person or entity
acting on its or their behalf, has (i) engaged directly or indirectly in any
form of general solicitation or general advertising (within the meaning of Rule
502(c) of Regulation D) in connection with the offering of the Securities or in
any manner involving a public offering within the meaning of Section 4(2) of the
Securities Act or (ii) engaged in any directed selling efforts within the
meaning of Regulation S, and all such persons will comply with the offering
restrictions requirement of Regulation S.  Except for this Agreement
and the other Transaction Documents, the Company has not entered, and will not
enter, into any arrangement or agreement with respect to the distribution of the
Securities.

       

      (h)           QIBs and Accredited
Investors.  The Company has not offered or sold any of the
Securities to any person or entity whom it reasonably believes is not (i) a
“qualified institutional buyer” as defined in Rule 144A or (ii) an institutional
“accredited investor” (as defined in clauses (1), (2), (3) and (7) of Rule
501(a) of Regulation D).

       

      (i)           Untrue Statements or
Omissions.  The Offering Memorandum did not, as of the date
thereof, and will not, as of the Closing Date, contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.  In addition, each of the Company’s filings with
the SEC since January 1, 2010 is, as of its respective filing date, complete and
correct in all material respects and does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
contained therein, in light of the circumstances under which such statements are
made, not misleading.

       

      
        	
              	
                4. 

              	
                COVENANTS
      OF THE PARTIES.

              

      

       

      (a)           Reasonable Best
Efforts.  Each Party shall use its reasonable best efforts to
timely satisfy each of the conditions to be satisfied by it as provided in Section 5 and Section 6, as
applicable, of this Agreement.

       

      (b)           Form D and Blue
Sky.  The Company shall file a Form D with respect to the
Securities as required under Regulation D.  The Company shall take all
necessary action in order to obtain an exemption for or to qualify the
Securities for sale to the Buyers at the Closing pursuant to this Agreement
under applicable securities or “Blue Sky” laws of the states of the United
States (or to obtain an exemption from such qualification).

       

      
        
          
          

        

        
          -8-

          
            

          

        

        
          
          

        

         

      

      (c)           Reservation of
Shares. The Company shall take all actions necessary to at all times have
authorized, and reserved for the purpose of issuance, no less than one hundred
five percent (105%) of the number of shares of Common Stock (the “Reservation Amount”)
issuable upon conversion of all of the Convertible Notes without regard to any
limitations on conversions or exercise.

       

      (d)           Use of
Proceeds.  The proceeds of the Securities shall be used only
(i) to pay off indebtedness under the DIP Facility and (ii) for working capital
and for general corporate purposes

       

      (e)           DTC. The Company
shall cause the Securities to be eligible for clearance and settlement through
the facilities of DTC.

       

      (f)           No Resales by the
Company.  The Company shall not, and shall use its reasonable
best efforts to not permit any of its affiliates (as defined in Rule 144 under
the Securities Act) to, resell any of the Securities that have been acquired by
any of them, except for Securities purchased by the Company or any of its
affiliates and resold in a transaction registered under the Securities
Act.

       

      (g)           No
Stabilization.  None of the Issuer Parties will take, directly
or indirectly, any action designed to or that could reasonably be expected to
cause or result in any stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Securities.

       

      (h)           Offering Memorandum.
The Company shall prepare an Offering Memorandum in a form approved by the Put
Option Parties (such approval not to be unreasonably withheld) and shall not
make any amendment or supplement to the Offering Memorandum which shall
reasonably be disapproved by the Put Option Parties.

       

      
        	
                 
      

              	
                5.

              	
                CONDITIONS
      TO THE COMPANY’S OBLIGATION TO SELL, AND THE GUARANTORS’ OBLIGATION TO
      GUARANTEE, THE CONVERTIBLE NOTES.

              

      

       

      The
obligation of the Company hereunder to issue and sell the Convertible Notes to
each Buyer at the Closing, and the Guarantors’ obligations to guarantee the
Convertible Notes, are subject to the satisfaction, at or before the Closing, of
each of the following conditions, provided that these
conditions are for the sole benefit of the Issuer Parties and may be waived by
the Issuer Parties at any time in their sole discretion by providing each Buyer
with prior written notice thereof:

       

      (a)           the
order confirming the Plan (the “Confirmation Order”)
by the Bankruptcy Court in the Chapter 11 Cases shall have become a final order,
in full force and effect without reversal, modification or stay and the Plan
shall have been consummated on the terms and conditions set forth therein, as
amended and in effect as of the date of the Confirmation Order;

       

      (b)           the
Effective Date and the Closing Date shall occur no later than October 1,
2010;

       

      
        
          
          

        

        
          -9-

          
            

          

        

        
          
          

        

         

      

      (c)           the
Put Option Parties shall have deposited funds as provided herein and in the
Support Agreement sufficient to satisfy in full their obligation under the
Support Agreement and the transactions contemplated by the Support Agreement
shall occur concurrently with the Closing of the Subscription
Offer;

       

      (d)           the
Subscription Agent shall have received a fully executed Subscription Certificate
for each Buyer;

       

      (e)           the
Trustee shall have executed and delivered the Convertible Notes Indenture and it
shall have become binding on and enforceable against the Trustee;

       

      (f)           the
parties to the Security Documents, other than the Company and the Guarantors,
shall have executed and delivered the Security Documents and the Security
Documents shall be binding on and enforceable against the parties thereto other
than the Company and the Guarantors;

       

      (g)           the
parties to the Intercreditor Agreement, other than the Company and the
Guarantors, shall have executed and delivered to the Company the Intercreditor
Agreement and the Intercreditor Agreement shall be binding on and enforceable
against the parties thereto other than the Company and the
Guarantors;

       

      (h)           the
Revolving Facility credit agreement shall have been executed and delivered by
all requisite parties (other than the Company and the Guarantors) and be binding
on and enforceable against all parties thereto (other than the Company and the
Guarantors), all conditions to funding thereunder shall have been satisfied with
the closing of the Transactions, all obligations under the DIP Facility (other
than contingent obligations not then due and payable) will have been repaid in
full, all commitments under the DIP Facility will have been terminated and all
liens and security interests related to the DIP Facility will have been
terminated or released;

       

      (i)           no
legal action or litigation shall have been taken or instituted, or threatened by
a third party, which seeks to (or does) restrain, prevent or otherwise impose
conditions on the Transactions which individually or in the aggregate could
reasonably be expected to result in a Material Adverse Effect (as defined below)
or that would materially and adversely affect the consummation of the
Transactions;

       

      (j)           the
representations and warranties of each Buyer contained in the Transaction
Documents to which such Buyer is a party shall be true and correct in all
material respects (other than those representations and warranties that are
qualified by “materiality” or “material adverse effect”, which shall be true and
correct in all respects) as of the date when made and as of the Closing Date as
though made at that time (except for representations and warranties that speak
as of a specific date, which shall be true and correct as of such specified
date), and each Buyer shall have performed, satisfied and complied in all
material respects with the covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by such Buyer at or prior
to the Closing Date;

       

      (k)           no
action shall have been taken and no statute, rule, regulation or order shall
have been enacted, adopted or issued by any federal, state or foreign
governmental or regulatory authority of competent jurisdiction that would, as of
the Closing Date, render impossible the issuance or sale of the Securities or
the consummation of the Transactions; and

       

      
        
          
          

        

        
          -10-

          
            

          

        

        
          
          

        

         

      

      (l)           no
injunction or order of any federal, state or foreign court shall have been
issued that would, as of the Closing Date, prevent the issuance or sale of the
Securities.

       

      
        	
                 
      

              	
                6.

              	
                CONDITIONS
      TO EACH BUYER’S OBLIGATION TO PURCHASE THE SECURITIES AT THE
      CLOSING.

              

      

       

      The
obligation of each Buyer hereunder to purchase the Securities at the Closing is
subject to the satisfaction, at or before the Closing, of each of the following
conditions, provided that these
conditions are for each Buyer’s sole benefit and may be waived by such Buyer at
any time in its sole discretion by providing the Company with prior written
notice thereof:

       

      (a)           each
of the representations set forth in Section 3 shall be
true and correct in all material respects (other than those representations and
warranties that are qualified by “materiality” or “material adverse effect”,
which shall be true and correct in all respects) as of the date of this
Agreement and as of the Closing Date as though made at that time (except for
representations and warranties made as of a specified date, which shall be true
and correct only as of the specified date);

       

      (b)           each
of the Issuer Parties shall have performed, satisfied and complied in all
material respects with all covenants, agreements and conditions required by this
Agreement and the Transaction Documents to which it is a party to be performed,
satisfied or complied with by such Issuer Party at or prior to the Closing
Date;

       

      (c)           there
shall not have occurred a dismissal or conversion of any Case to a case under
chapter 7 of the Bankruptcy Code or the appointment of a chapter 11 trustee in
any Case;

       

      (d)           no
provision of the Plan (as filed with the Bankruptcy Court) shall have been
amended, supplemented or otherwise modified in any respect in a manner
materially adverse to the Buyers without the consent of the Buyers (such consent
not to be unreasonably withheld or delayed);

       

      (e)           the
Confirmation Order by the Bankruptcy Court in the Cases shall have become a
final order, in full force and effect without reversal, modification or stay;
the Plan shall have been consummated on the terms and conditions set forth
herein, as amended and in effect as of the date of the Confirmation
Order;

       

      (f)           the
Company shall provide evidence to the Buyers, in form and substance reasonably
satisfactory to the Buyers, that substantially concurrently with the issuance of
the Convertible Notes all obligations under the DIP Facility (other than
contingent obligations not then due and payable) will have been repaid in full,
all commitments under the DIP Facility will have been terminated and all liens
and security interests related to the DIP Facility will have been terminated or
released;

       

      
        
          
          

        

        
          -11-

          
            

          

        

        
          
          

        

         

      

      (g)           except
to the extent disclosed by the Company in any filing made by the Company with
the Securities and Exchange Commission (the “SEC”) prior to July
20, 2010, in the Plan or in writing to the Put Option Parties on July 20, 2010,
(i) there shall not have occurred or become known to the Buyers any events,
developments, conditions or circumstances that, individually or in the
aggregate, have had or could reasonably be expected to have a material adverse
effect on the business, operations, property, condition (financial or otherwise)
or prospects of the Company and its direct and indirect subsidiaries, taken as a
whole (or the reorganized Company and its direct and indirect subsidiaries,
taken as a whole) (a “Material Adverse
Effect”) and (ii) no material assets of the Debtors shall have been
sold or agreed to be sold outside of the ordinary course of business from and
after the date hereof;

       

      (h)           (i)
the Company and the Guarantors shall have entered into the Transaction Documents
and the Company shall have delivered the executed versions  of the
Transaction Documents to the Put Option Parties on the Closing Date and (ii) on
the Effective Date, (A) there not being any event or condition which constitutes
an event of default, or which upon notice, lapse of time, or both would
constitute an event of default, under the Transaction Documents and (B) the
Transaction Documents being in full force and effect;

       

      (i)           the
payment of the fees and reimbursement of out-of-pocket costs and expenses as set
forth in the Purchaser Letter, the Plan and the letter, dated as of February 22,
2010, between the Company and Paul, Weiss, Rifkind, Wharton & Garrison LLP
(“Paul Weiss”)
regarding payment by the Company of fees and expenses to Paul Weiss as counsel
to a group formed by certain holders of the Existing Notes (the “Expense Agreement”),
in accordance with the terms hereof and thereof; provided, that the
Put Option Parties shall cause Paul Weiss to provide the Company with an
estimate of its fees and expenses through the Closing Date at least two (2)
business days prior to the Closing Date;

       

      (j)           the
Effective Date and the Closing Date shall occur on or prior to October 1,
2010;

       

      (k)           as
of the date of the Offering Memorandum and on the Closing Date, the materials to
be used in connection with the Subscription Offer regarding the Company, its
subsidiaries and the Convertible Notes, for distribution to eligible holders of
the Existing Notes, when furnished and taken as a whole, shall be complete and
correct in all material respects and shall not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
contained therein, in light of the circumstances under which such statements are
made, not misleading;

       

      (l)           the
following shall be true and correct: each of the Company’s filings with the SEC
since January 1, 2010 is, as of its respective filing date, complete and correct
in all material respects and does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements contained
therein, in light of the circumstances under which such statements are made, not
misleading;

       

      
        
          
          

        

        
          -12-

          
            

          

        

        
          
          

        

         

      

      (m)           substantially
concurrently with the issuance of the Convertible Notes, the Debtors and the
lenders under the Revolving Facility (i) having entered into the definitive
documentation for the Revolving Facility and any related documentation and
reasonably satisfactory to the Buyers and (ii) all conditions to borrowing under
the Revolving Facility shall be satisfied or waived (provided that if such
waiver could reasonably be expected to be adverse in any material respect to the
interests of the Put Option Parties, the Put Option Parties shall have consented
to such waiver) on or prior to the Effective Date, and (iii) on the Effective
Date (y) there shall not be any event or condition which constitutes an
event of default, or which upon notice, lapse of time, or both would become an
event of default, under the Revolving Facility and (z) the Revolving Facility
shall be in full force and effect;

       

      (n)           on
the Closing Date, the Put Option Parties shall have received and the Trustee
shall be entitled to rely on an opinion from Kirkland & Ellis LLP, counsel
to the Issuer Parties, dated as of the Closing Date and addressed to the Put
Option Parties, in form and substance reasonably satisfactory to the Put Option
Parties;

       

      (o)           on
the Closing Date, the Put Option Parties shall have received and the Trustee
shall be entitled to rely on (i) an opinion from Baker Botts L.L.P., Texas
counsel to the Issuer Parties, dated as of the Closing Date and addressed to the
Put Option Parties, in form and substance reasonably satisfactory to the Put
Option Parties and (ii) opinions from any other counsel to the Issuer Parties,
dated as of the Closing Date and addressed to the Put Option Parties, as are
delivered in connection with the Revolving Facility;

       

      (p)           the
Put Option Parties shall have received a certificate of each of the Issuer
Parties, dated the Closing Date, signed on behalf of each Issuer Party by, in
the case of the Company, its Chairman of the Board, President or any Vice
President, or in the case of each other Issuer Party by an authorized officer of
such Issuer Party, to the effect that:

       

      (i)           the
representations and warranties of such Issuer Party contained in this Agreement
are true and correct in all material respects on and as of the date hereof and
on and as of the Closing Date (unless such representations and warranties relate
to a specified date), and such Issuer Party has performed all covenants and
agreements and satisfied all conditions on its part to be performed or satisfied
hereunder at or prior to the Closing Date (unless otherwise
waived);

       

      (ii)           at
the Closing Date, since the date hereof or since the date of the most recent
financial statements in the Offering Memorandum (exclusive of any amendment or
supplement thereto after the date hereof), no event or development has occurred,
and no information has become known to such officer, that, individually or in
the aggregate, has or would be reasonably likely to have a Material Adverse
Effect; and

       

      (iii)           the
sale of the Securities hereunder has not been enjoined (temporarily or
permanently);

       

      (q)           the
Put Option Parties shall have received a certificate of each of the Issuer
Parties, dated the Closing Date, signed on behalf of each Issuer Party by a
respective Secretary or Assistant Secretary, which shall include, among other
things, (x) charter or by-laws or similar constitutive documents of such Issuer
Party, (y) resolutions authorizing the issuance of the Convertible Notes or the
Guarantees, as applicable, and (z) such other information as the Put Option
parties may reasonably require;

       

      
        
          
          

        

        
          -13-

          
            

          

        

        
          
          

        

         

      

      (r)           on
the Closing Date, the Put Option Parties shall have received (i) the Security
Documents to the extent and in the manner provided for in the Convertible Notes
Indenture and the Security Documents and as described in the Offering
Memorandum, in each case executed by the parties thereto, (ii) evidence
that all of the liens on the Collateral other than those liens permitted by the
Convertible Notes Indenture and the applicable Security Documents have been
released, terminated or arrangements to further release or terminate have been
made (which with respect to any mortgages currently encumbering any of the
Collateral, shall be deemed satisfied so long as the title insurer is
irrevocably committed to issue lender’s title insurance policies insuring that
the holders of the Securities have a first priority lien on the real estate
Collateral (subject to permitted liens as described in the Convertible Notes
Indenture and Security Documents)) and (iii) all documents necessary to
establish that the Collateral Agent for the benefit of the holders of the
Securities will have a perfected first priority security interest or lien on the
Collateral (subject to permitted liens as described in the Convertible Notes
Indenture and the Security Documents), as contemplated herein and in the
Offering Memorandum, shall have been delivered to the Collateral
Agent;

       

      (s)           on
the Closing Date, the Put Option Parties shall have received the Convertible
Notes executed by the Company and the Guarantees executed by the Guarantors, and
the Securities shall be in full force and effect at all times from and after the
Closing Date; and

       

      (t)           all
governmental, shareholder or third party consents, if any, necessary for the
consummation of the Transaction having been obtained.

       

      
        	
              	
                7. 

              	
                EFFECTIVENESS
      AND TERMINATION.

              

      

       

      (a)           This
Agreement shall become effective only upon the Company’s acceptance of the
applicable Subscription Certificates following the Subscription Offer Expiration
Time (such time, the “Subscription Acceptance
Time”) and in accordance with the terms and conditions set forth in the
Offering Memorandum.  Prior to the Company’s acceptance of a
Subscription Certificate with respect to such Buyer, other than with respect to
a Put Option Party, (i) this Agreement shall not constitute a binding obligation
of the Company, the Guarantors or such Buyer and (ii) none of the Company, the
Guarantors or such Buyer shall have any rights or obligations under this
Agreement.  Each Buyer agrees that upon the Company’s acceptance of
such Buyer’s Subscription Certificate following the Subscription Offer
Termination Date, such Buyer (including the Put Option Parties) shall
automatically become a party to this Agreement and thereafter be bound by the
terms and conditions of hereof.  The Company’s acceptance of a
Subscription Certificate shall be evidenced solely by the Company providing the
Subscription Agent notice that such Subscription Certificate has been accepted,
and the Company shall not be deemed to have accepted a Subscription Certificate
in absence of such notice.

       

      (b)           This
Agreement shall terminate:

       

      (i)           upon
the mutual written agreement of the Company and the Buyers who have collectively
subscribed to purchase a majority of the aggregate principal amount of
Convertible Notes offered pursuant to the Subscription Offer (the “Requisite Buyers”),
provided that
such Requisite Buyers shall include each of the Put Option Parties;

       

      
        
          
          

        

        
          -14-

          
            

          

        

        
          
          

        

         

      

      (ii)           upon
written notice by the Company to the Buyers after October 1, 2010 (the “Drop Dead Date”);
provided that
the Company shall not be entitled to terminate this Agreement pursuant to this
Section
7(b)(iii) if it is then in material breach of its obligations under this
Agreement;

       

      (iii)           upon
written notice by the Put Option Parties after the Drop Dead Date; provided that
the Put Option Parties shall not be entitled to terminate this Agreement
pursuant to this Section 7(b)(iv) if
the Put Option Parties are then in material breach of their obligations under
this Agreement;

       

      (iv)           10
days after the Requisite Buyers have delivered written notice to the Company
that the Company has materially breached this Agreement, if such breach remains
uncured at the conclusion of such 10-day period; provided that in no
event shall this cure period limit the right of the Requisite Buyers to
terminate after the Drop Dead Date; provided further that such
Requisite Buyers shall include each of the Put Option Parties; or

       

      (v)           10
days after the Company has delivered notice to the Buyers that the Buyers have
materially breached this Agreement, if such breach remains uncured at the
conclusion of such 10-day period; provided that in no
event shall this cure period limit the right of the Company to terminate after
the Drop Dead Date.

       

      (c)           Except
to the extent specified in this Agreement, upon termination of this Agreement in
accordance with its terms, all rights and obligations of the Parties shall
terminate automatically and shall become null and void and no Party shall have
any liability to any other Party following termination of this Agreement; provided that this
Section 7(c)
shall in no way limit any liabilities or obligations any Party may have to
another Party pursuant to the Support Agreement or any other agreement or
instrument to which such Party is a party or is otherwise bound); provided, further, that no
termination of this Agreement shall relieve any Party in breach of its
obligations under this Agreement for damages arising from the breach of this
Agreement.

       

      (d)           Notwithstanding
anything to the contrary herein, the provisions of Section 8, Section 9 and
Section 10
shall survive termination.

       

      
        	
              	
                8. 

              	
                EXPENSES.

              

      

       

      Whether
or not the transactions contemplated in this Agreement are consummated or this
Agreement is terminated, the Company agrees to pay or cause to be paid all
expenses incident to the performance of its respective obligations under this
Agreement, including: (i) the fees, disbursements and expenses of the Company’s
counsel and accountants; (ii) all costs and expenses incurred by the Company or
its subsidiaries in connection with the issuance and delivery of the Securities,
including any necessary issue, transfer or other stamp taxes payable thereon;
(iii) the costs and charges of any transfer agent, registrar or depositary; (iv)
the fees and expenses of the Trustee, including the reasonable fees and
disbursements of counsel for the Trustee in connection with the Convertible
Notes Indenture and the Securities, (v) all fees and expenses (including
reasonable fees and expenses of counsel) of the Company in connection with
approval of the Convertible Notes by DTC for “book entry” transfer and (vi) all
other costs and expenses incurred by the Company in connection with the
performance of the its obligations hereunder for which provision is not
otherwise made in this Section 8. It is
understood that, except as provided in Section 9, the
Company shall have no obligation under this Agreement to pay any of the Buyers’
costs and expenses, including fees and disbursements of their counsel, or any
issue, transfer or other stamp taxes payable on resale of any of the Securities
by the Buyers; provided, that the
Company shall be required to pay certain expenses and fees to the Put Option
Parties and their counsel pursuant to the Expense Agreement and the Purchaser
Letter.

       

      
        
          
          

        

        
          -15-

          
            

          

        

        
          
          

        

         

      

      
        	
              	
                9. 

              	
                INDEMNIFICATION.

              

      

       

      (a)           The
Issuer Parties, jointly and severally, agree to indemnify and hold harmless the
Buyers, each of their affiliates and each of their and their affiliates’
respective officers, directors, partners, shareholders, trustees, controlling
persons, employees, agents, advisors, attorneys and representatives (each, an
“Indemnified
Party”) from and against any and all claims, damages, losses, liabilities
and related reasonable out-of-pocket costs and expenses (including, without
limitation, reasonable fees and disbursements of one counsel for the Indemnified
Parties, except to the extent an actual conflict exists among them) that may be
incurred by or asserted or awarded against any Indemnified Party, in each case
arising out of or in connection with or relating to the Transactions, this
Agreement or the transactions contemplated hereby, any use made or proposed to
be made with the proceeds of the Convertible Notes, or any claim, litigation,
investigation or proceeding relating to any of the foregoing, regardless of
whether any Indemnified Party is a party thereto, and shall reimburse (promptly
following written demand, including documentation reasonably supporting such
request) each Indemnified Party on demand for all reasonable legal and other
out-of-pocket expenses incurred by it in connection with investigating,
preparing to defend or defending, or providing evidence in or preparing to serve
or serving as witness with respect to, any lawsuit, investigation, claim or
other proceeding relating to any of the foregoing (including, without
limitation, in connection with the enforcement of the indemnification
obligations set forth herein), irrespective of whether the transactions
contemplated hereby are consummated, except to the extent such claim, damage,
loss, liability, or expense is (i) found in a final non-appealable judgment by a
court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of such Indemnified Party or any of its affiliates or its or
its affiliates’ respective officers, directors, partners, shareholders,
trustees, controlling persons, employees, agents, advisors, attorneys or
representatives or (ii) solely relating to or arising from a dispute between or
among the Indemnified Parties.

       

      (b)           If
any Indemnified Party shall receive an indemnification payment in respect of any
claim, damage, loss, liability or expense pursuant to Section 9 and such
claim, damage, loss, liability or expense is found by a final non-appealable
judgment by a court of competent jurisdiction to have resulted from the gross
negligence or willful misconduct of such Indemnified Party or any of its
affiliates or its or its affiliates’ respective officers, directors, partners,
shareholders, trustees, controlling persons, employees, agents, advisors,
attorneys or representatives, then such Indemnified Party shall refund the
amount received by it in respect of such indemnification in excess of that
amount to which it is entitled under the terms of Section
9.  In no event, however, shall any Indemnified Party be liable
to the Issuer Parties or any of an Issuer Party’s affiliates on any theory of
liability for any special, indirect, consequential or punitive
damages.

       

      
        
          
          

        

        
          -16-

          
            

          

        

        
          
          

        

         

      

      (c)           The
Issuer Parties will not enter into any settlement of any lawsuit, claim or other
proceeding arising out of the Transactions without the consent of a majority of
the Buyers unless such settlement (i) includes an explicit and unconditional
release from the party bringing such lawsuit, claim or other proceeding of all
Indemnified Parties and (ii) does not include a statement as to or an admission
of fault, culpability or a failure to act by or on behalf of any Indemnified
Party.  No Indemnified Party shall be liable to the Issuer Parties or
any of their affiliates for any damages arising from the use by unauthorized
persons of any information made available to the Buyers by the Issuer Parties or
any of their representatives through electronic, telecommunications or other
information transmission systems that is intercepted by such
persons.

       

      (d)           Notwithstanding
the foregoing, no Issuer Party nor any of its affiliates shall have any
liability for any settlement of any lawsuit, claim or other proceeding arising
out of this Agreement or the transactions contemplated hereby if such settlement
is entered into without the prior written consent of such Issuer Party, not to
be unreasonably withheld.

       

      
        	
              	
                10. 

              	
                MISCELLANEOUS.

              

      

       

      (a)           Governing Law; Jurisdiction;
Waiver of Jury Trial.

       

      (i)           This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of New York, without regard to internal conflicts of law principles
that may apply to this Agreement in any other jurisdiction.  Each of
the Parties hereby irrevocably and unconditionally submits to the nonexclusive
jurisdiction and venue of the Bankruptcy Court, and in the event that the
Bankruptcy Court does not have or declines to exercise jurisdiction or there is
a reason to believe that it would not have or would decline to exercise
jurisdiction, to the nonexclusive jurisdiction and venue of any New York State
court or Federal court of the United States of America located in New York City
in the Borough of Manhattan, but solely in any action or proceedings arising out
of or relating to this Agreement or the Transactions.  Each of the
Parties agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law.

       

      (ii)           Each
Party irrevocably waives, to the fullest extent permitted by applicable law, (A)
any right to trial by jury in any action, proceeding or counterclaim (whether
based on contract, tort or otherwise) arising out of or relating to this
Agreement or the Transactions and (B) any objection that it may now or hereafter
have to the laying of venue of any such action, proceeding or counterclaim in
the Bankruptcy Court or the state or federal courts located in New York City in
the Borough of Manhattan.

       

      (b)           Counterparts.  This
Agreement may be executed in two or more counterparts, each of which shall be
deemed to be an original, but all of which together shall constitute one and the
same instrument.  This Agreement may be executed in facsimile form or
in portable document format (pdf).

       

      
        
          
          

        

        
          -17-

          
            

          

        

        
          
          

        

         

      

      (c)           Professional
Advice.  Each of the Parties has received independent legal and
professional advice from advisors of its choice with respect to the provisions
hereof and the advisability of entering into the agreements set forth
herein.  Prior to the execution hereof, each of the Parties and their
applicable advisors reviewed this Agreement and the Exhibits
hereto.

       

      (d)           Headings.  The
headings of this Agreement are for convenience of reference and shall not form
part of, or affect the interpretation of, this Agreement.

       

      (e)           Severability.  If
any provision of this Agreement is prohibited by law or otherwise determined to
be invalid or unenforceable by a court of competent jurisdiction, the provision
that would otherwise be prohibited, invalid or unenforceable shall be deemed
amended to apply to the broadest extent that it would be valid and enforceable,
and the invalidity or unenforceability of such provision shall not affect the
validity of the remaining provisions of this Agreement so long as this Agreement
as so modified continues to express, without material change, the original
intentions of the parties as to the subject matter hereof and the prohibited
nature, invalidity or unenforceability of the provision(s) in question does not
substantially impair the respective expectations or reciprocal obligations of
the parties or the practical realization of the benefits that would otherwise be
conferred upon the parties.  The parties will endeavor in good faith
negotiations to replace the prohibited, invalid or unenforceable provision(s)
with a valid provision(s), the effect of which comes as close as possible to
that of the prohibited, invalid or unenforceable provision(s).

       

      (f)           Entire Agreement;
Amendments.  This Agreement (including the recitals, annexes,
exhibits and schedules hereto), the other Transaction Documents, the Support
Agreement and the Expense Agreement supersede all other prior oral or written
agreements between the Buyers, the Company, their affiliates and persons or
entities acting on their behalf with respect to the matters discussed herein,
and this Agreement, the other Transaction Documents, the Support Agreement and
the instruments referenced herein and therein contain the entire understanding
of the parties with respect to the matters covered herein and therein and,
except as specifically set forth herein or therein, neither the Company nor any
Buyer makes any representation, warranty, covenant or undertaking with respect
to such matters.  No provision of this Agreement may be amended other
than by an instrument in writing signed by the Company and the holders of at
least a majority of the Aggregate Principal Amount, and any amendment to this
Agreement made in conformity with the provisions of this Section 10(f) shall
be binding on all Buyers and holders of Securities as applicable; provided, however, that any
amendment or modification to this Agreement which would (i) amend the Purchase
Price shall require the consent of each Buyer or (ii) materially and adversely
affect a Buyer in a manner disproportionate to the other Buyers shall require
the consent of such Buyer.  No provision hereof may be waived other
than by an instrument in writing signed by the party against whom enforcement is
sought.

       

      (g)           Notices.  Any
notices, consents, waivers or other communications required or permitted to be
given under the terms of this Agreement must be in writing and will be deemed to
have been delivered:  (i) upon receipt, when delivered personally;
(ii) upon receipt, when sent by facsimile (provided confirmation of transmission
is mechanically or electronically generated and kept on file by the sending
party); or (iii) one business day after deposit with an overnight courier
service, in each case properly addressed to the party to receive the
same.  The addresses and facsimile numbers for such communications
shall be:

       

      
        
          
          

        

        
          -18-

          
            

          

        

        
          
          

        

         

      

      If to the Company or to a
Guarantor, to:

       

      U.S.
Concrete, Inc.

      2925
Briarpark, Suite 1050

      Houston,
Texas  77042

      
        	
              	
                Telephone: 

              	
                (713)
      499-6200

              

      

      
        	
              	
                Facsimile: 

              	
                (713)
      499-6201

              

      

      
        	
              	
                Attention: 

              	
                General
      Counsel

              

      

       

      

      With
a copy to (for information purposes only):

       

      Kirkland &
Ellis LLP

      300 North
LaSalle Street

      Chicago,
Illinois  60654

      
        	
              	
                Telephone: 

              	
                (312)
      862-2163

              

      

      
        	
              	
                Facsimile: 

              	
                (312)
      862-2200

              

      

      
        	
              	
                Attention: 

              	
                Carol
      Anne Huff, Esq.

              

      

       

      If to a
Buyer:

       

      To its
address and facsimile number set forth on the Schedule of Buyers, with copies to
such Buyer’s representatives as set forth in Column (5) of the Schedule of
Buyers.

       

      In
each case, with a copy to (for informational purposes only):

       

      Paul,
Weiss, Rifkind, Wharton & Garrison LLP

      1285
Avenue of the Americas

      New York,
New York 10019

      
        	
              	
                Telephone: 

              	
                (212)
      373-3085

              

      

      
        	
              	
                Facsimile: 

              	
                (212)
      757-3990

              

      

      
        	
              	
                Attention: 

              	
                Tracey
      Zaccone, Esq.

              

      

       

      or to
such other address, facsimile number and/or email address to the attention of
such other person or entity as the recipient party has specified by written
notice given to each other party five (5) days prior to the effectiveness of
such change.  Written confirmation of receipt (A) given by the
recipient of such notice, consent, waiver or other communication, (B)
mechanically or electronically generated by the sender’s facsimile machine
containing the time, date, recipient facsimile number and an image of the first
page of such transmission or (C) provided by an overnight courier service shall
be rebuttable evidence of personal service, receipt by facsimile or receipt from
an overnight courier service in accordance with clause (i), (ii) or (iii) above,
respectively.

       

      
        
          
          

        

        
          -19-

          
            

          

        

        
          
          

        

         

      

      (h)           Successors and
Assigns.  This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and assigns, including
any purchasers of the Securities pursuant to this Agreement.  The
Company shall not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the holders of at least a majority of the
Aggregate Principal Amount.  A Buyer may assign some or all of its
rights hereunder to an affiliate of such Buyer with the prior written consent of
the Company or as otherwise provided in the Support Agreement, in which event
such assignee shall be deemed to be a Buyer hereunder with respect to such
assigned rights.

       

      (i)           No Third Party
Beneficiaries.  This Agreement is intended for the benefit of
the parties hereto and their respective permitted successors and assigns, and is
not for the benefit of, nor may any provision hereof be enforced by, any other
person or entity other than the Indemnified Parties.

       

      (j)           Further
Assurances.  The Parties shall do and perform or cause to be
done and performed all such further acts and things and shall execute and
deliver such other agreements, certificates, instruments and documents as any
other party hereto may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
Transactions in accordance with the terms and conditions hereof.

       

      (k)           No Strict
Construction.  The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any
party.

       

      (l)           Remedies.  Each
Buyer and each holder of the Securities shall have all rights and remedies set
forth in the Transaction Documents and all rights and remedies which such
holders have been granted at any time under any other agreement or contract and
all of the rights which such holders have under any law.  Any person
or entity having any rights under any provision of this Agreement shall be
entitled to enforce such rights specifically (without posting a bond or other
security), to recover damages by reason of any breach of any provision of this
Agreement and to exercise all other rights granted by
law.  Furthermore, each Issuer Party recognizes that in the event that
it fails to perform, observe or discharge any or all of its obligations under
the Transaction Documents, any remedy at law may prove to be inadequate relief
to the Buyers.  Each Issuer Party therefore agrees that the Buyers
shall be entitled to temporary and permanent injunctive relief in any such case,
including specific performance, without the necessity of proving actual damages
and without posting a bond or other security, and that the Issuer Parties shall
pay or reimburse the Buyers for all costs and expenses, including reasonable
attorneys’ fees, incurred by the Buyers (or their agents or representatives) in
connection therewith.

       

      (m)           Several, Not Joint,
Obligations. The agreements, representations, liabilities and obligations
of the parties under this Agreement are, in all respects, several and not
joint.

       

      (n)           Time of
Essence.  Time is of the essence with respect to all provisions
of this Agreement.

       

      *  *  *  *  *  *

       

      
        
          
          

        

        
          -20-

          
            

          

        

        
          
          

        

         

      

      IN WITNESS WHEREOF, the
Company and each Guarantor has caused its respective signature page to this Note
Purchase Agreement to be duly executed as of the date first written
above.

       

      
        
          	 	COMPANY:	 
	 	 	 
	 	U.S.
      CONCRETE, INC.	 
	 	 	 
	 	 	 	 
	
                   

                	
                  By:
      

                	/s/
      Michael W. Harlan 	 
	 	 	
                  Name:
      Michael W. Harlan

                	 
	 	 	
                  Title:   Chief
      Executive Officer and President

                	 
	 	 	 
	 	 	 
	 	GUARANTORS:	 
	 	 	 
	 	ALBERTA
      INVESTMENTS, INC. 

                  ALLIANCE
      HAULERS, INC.

                  ATLAS
      REDI-MIX, LLC

                  ATLAS-TUCK
      CONCRETE, INC.

                  BEALL
      CONCRETE ENTERPRISES, LLC

                  BEALL
      INDUSTRIES, INC.

                  BEALL
      INVESTMENT CORPORATION, INC.

                  BEALL
      MANAGEMENT, INC.

                  HAMBURG
      QUARRY LIMITED LIABILITY COMPANY

                  REDI-MIX
      CONCRETE, L.P.

                  REDI-MIX
      GP, LLC

                  REDI-MIX,
      LLC

                	 
	 	 	 

        

      

      
        
          	 	 	 	 
	
                   

                	
                  By:
      

                	 /s/
      Michael W. Harlan	 
	 	 	
                  Name:
      Michael W. Harlan

                	 
	 	 	
                  Title:   President

                	 
	 	 	 	 

        

      

       

      
        
          	
                  Signature
      Page to Note Purchase
Agreement

                

        

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
         

        
          
            	 	
                    KURTZ
      GRAVEL COMPANY

                    SUPERIOR HOLDINGS,
      INC.

                    TITAN
      CONCRETE INDUSTRIES, INC.

                    USC
      ATLANTIC, INC.

                    USC
      MICHIGAN, INC.

                  	 
	 	 	 
	 	 	 	 
	
                     

                  	
                    By:
      

                  	 /s/
      Michael W. Harlan	 
	 	 	
                    
                      Name:
      Michael W. Harlan

                    

                  	 
	 	 	
                    
                      Title:   Vice
      President and Secretary

                    

                  	 
	 	 	 
	 	
                    EASTERN
      CONCRETE MATERIALS, INC.

                  	 
	 	 	 

          

        

        
          
            	 	 	 	 
	
                     

                  	
                    By:
      

                  	 /s/
      Michael W. Harlan	 
	 	 	
                    
                      Name:
      Michael W. Harlan

                    

                  	 
	 	 	
                    
                      Title:   President
      and Secretary

                    

                  	 
	 	 	 	 

          

        

         

        
          
            	
                    Signature
      Page to Note Purchase
Agreement

                  

          

        

                           

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

       

        
          
            	 	
                    
                      AMERICAN
      CONCRETE PRODUCTS, INC.

                      BRECKENRIDGE
      READY MIX, INC.

                      BUILDERS’
      REDI-MIX, LLC

                      BWB,
      INC. OF MICHIGAN

                      CENTRAL
      CONCRETE SUPPLY CO., INC.

                      CENTRAL
      PRECAST CONCRETE, INC.

                      INGRAM
      CONCRETE, LLC

                      MG,
      LLC

                      SAN
      DIEGO PRECAST CONCRETE, INC.

                      SMITH
      PRE-CAST, INC.

                      SIERRA
      PRECAST, INC.

                      SUPERIOR
      CONCRETE MATERIALS, INC.

                      U.S.
      CONCRETE ON-SITE, INC.

                      USC
      MANAGEMENT CO., LLC

                      USC
      PAYROLL, INC.

                      USC
      TECHNOLOGIES, INC.

                    

                  	 
	 	 	 
	 	 	 	 
	
                     

                  	
                    By:
      

                  	 /s/
      Curt M. Lindeman	 
	 	 	
                    
                      
                        Name:
      Curt M. Lindeman

                      

                    

                  	 
	 	 	
                    
                      
                        Title:   Vice
      President and Secretary

                      

                    

                  	 
	 	 	 
	 	
                    LOCAL
      CONCRETE SUPPLY & EQUIPMENT,LLC

                    MASTER
      MIX CONCRETE, LLC

                    MASTER
      MIX, LLC

                    NYC
      CONCRETE MATERIALS, LLC

                    
                      PEBBLE
      LANE ASSOCIATES, LLC

                    

                  	 
	 	 	 

          

        

        
          
            	 	 	 	 
	
                     

                  	
                    By:
      

                  	 /s/
      Curt M. Lindeman	 
	 	 	
                    
                      
                        Name:
      Curt M. Lindeman

                      

                    

                  	 
	 	 	
                    
                      
                        Title:   President
      and Secretary

                      

                    

                  	 
	 	 	 	 

          

        

         

        
          
            	
                    Signature
      Page to Note Purchase
Agreement

                  

          

        

                         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

           

          
            
              	 	CONCRETE ACQUISITION
      III, LLC

                      CONCRETE
      ACQUISITION IV, LLC

                      CONCRETE
      ACQUISITION V, LLC

                      CONCRETE
      ACQUISITION VI, LLC

                      CONCRETE
      XXXIII ACQUISITION, INC.

                      CONCRETE
      XXXIV ACQUISITION, INC.

                      CONCRETE
      XXXV ACQUISITION, INC.

                      CONCRETE
      XXXVI ACQUISITION, INC.

                    	 
	 	
                       

                    	 	 
	 	 	 	 
	
                       

                    	
                      By:
      

                    	 /s/
      Curt M. Lindeman	 
	 	 	
                      Name:
      Curt M. Lindeman

                    	 
	 	 	
                      Title:   President

                    	 
	 	 	 	 

            

          

          
             

            
              
                	
                        Signature
      Page to Note Purchase
Agreement

                      

              

            

                             

            
              
                
                

              

              
                
                

                
                  

                

              

              
                
                

              

            

          

        

      

       

      
        
          	 	RIVERSIDE
      MATERIALS, LLC	 
	 	 	 	 
	
                   

                	
                  By:
      

                	 /s/
      Wallace H. Johnson	 
	 	 	
                  Name:
      Wallace H. Johnson

                	 
	 	 	
                  Title:   President
      and Secretary

                	 
	 	 	 	 

        

         

        
          
            	
                    Signature
      Page to Note Purchase
Agreement

                  

          

        

                         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

       

      Annex
I

      

      SCHEDULE OF SUBSCRIPTION
PARTIES

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      Annex
II

      SCHEDULE OF PUT OPTION
PARTIES

      

      
        	
                The
      Monarch Funds

              
	 
	
                Monarch
      Capital Master Partners LP

              
	 
	
                Monarch
      Cayman Fund Ltd.

              
	 
	
                Monarch
      Debt Recovery Master Fund Ltd.

              
	 
	
                Monarch
      Opportunities Master Fund Ltd.

              
	 
	
                Oakford
      MF Limited

              
	 
	
                The
      Whitebox Funds

              
	 
	
                Whitebox
      Convertible Arbitrage Partners, LP

              
	 
	
                Whitebox Multi-Strategy
      Partners, LP

              
	 
	
                Whitebox
      Credit Arbitrage Partners, LP

              
	 
	
                The
      York Funds

              
	 
	
                York
      Credit Opportunities Master Fund, L.P.

              
	 
	
                York
      Credit Opportunities Fund, L.P.

              

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      
        Exhibit
A

       

      FORM
OF SUBSCRIPTION CERTIFICATE

      

      [Attached]

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

        
          
Exhibit
B

          
            
               

               

              FORM
OF REGISTRATION RIGHTS AGREEMENT

              

              [Attached]Unassociated Document

     

    
      Exhibit
10.1

       

    

    OPTION
EXERCISE AGREEMENT

    

    OPTION EXERCISE AGREEMENT,
dated as of August 25, 2010, and effective as of July 1, 2010, between Advanced
Automation Group, LLC, a Delaware limited liability company (“Company”), Harbin
Electric, Inc., a Nevada corporation (“HRBN”), Shelton Technology, LLC, a
Michigan limited liability company (“Shelton”), and the persons listed on Schedule A (“Shelton
Personnel”).

    

    Pursuant
to an letter agreement, dated April 9, 2007, between HRBN and Shelton, as
amended December 11, 2008, April 21, 2009, and December 7, 2009 (“Letter
Agreement”), HRBN has the right (“Option”) to require Shelton to contribute to
Company the Licensed Assets and the Customer Accounts, as defined in the Letter
Agreement (“the Contributed Assets”), in consideration for a limited liability
company interest entitling Shelton to a 49% share of Company’s profits, losses,
and distributions of its assets, in accordance with Company’s Limited Liability
Company Agreement in the form of Exhibit A.

    

    The
parties accordingly agree as follows:

    

     

    ARTICLE
I

    EXERCISE
OF OPTION

     

    1.1           Exercise.  HRBN
hereby exercises the Option.

     

    ARTICLE
II

    CONTRIBUTION
BY SHELTON

     

    2.1           Contribution.  Shelton
hereby contributes to Company all right, title, and interest in and to all of
the Contributed Assets, free and clear of any adverse claim, covenant not to
compete or similar agreement, encumbrance, license right, lien, security
interest, transfer restriction, royalty or similar obligation, or other claim or
right of any third party (“Encumbrance”).  Shelton, at its expense,
shall execute all such further documents and instruments, including assignments
of ownership or title or of any registered copyright, mask work right, patent,
trademark or service mark, or Internet domain name or application therefor
(“Registered IP”) included in the Contributed Assets, in form sufficient to
register same in Company’s name or the name of any Company designee, with the
United States Patent and Trademark Office or like authority of the United
States, any state, territory, or other jurisdiction of the United States, or any
foreign government, and take such further action, including payment of transfer
fees, as Company shall reasonably request from time to time to effectuate the
intentions hereof.

     

    ARTICLE
III

    REPRESENTATIONS
AND WARRANTIES

     

    Shelton
and the Shelton Personnel hereby jointly and severally represent and warrant to
Company as follows:

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

       

    

    3.1           Shelton’s Formation,
etc.  Shelton is a limited liability company organized and in
good standing under the laws of Michigan.  Shelton previously has
delivered to Company complete and accurate copies of its certificate of
formation and operating agreement, including all amendments, all of which are in
effect as of the date hereof.

    

     

    3.2           Proper Proceedings,
etc.  All limited liability action and other proceedings
required to be taken or conducted by or on behalf of Shelton or its members or
managers to authorize Shelton to enter and carry out this Agreement have been
duly taken or conducted, and this Agreement constitute a legal, valid and
binding obligation of Shelton and each of the Shelton Personnel, enforceable
against each in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors’ rights generally and to the extent that equitable
remedies, such as injunctive relief or specific performance are within the
discretion of courts of competent jurisdiction.

     

     

    3.3           No
Conflict.  The execution and delivery of this Agreement, and
the consummation of the transactions contemplated hereby will not conflict with,
or result in any violation of, or default or loss of a benefit under or permit
the acceleration of any obligation under Shelton’s organizational documents, any
contract, agreement, or commitment of Shelton, or any permit, concession, grant
franchise, license, judgment, order, decree, statute, law, ordinance, rule, or
regulation applicable to Shelton or to its properties, including any of the
Contributed Assets.

     

     

    3.4           Government
Authorization.  No consent, approval, order, or authorization
of or registration, declaration or filing with, any governmental or regulatory
authority is required in connection with the execution and delivery of this
Agreement or the consummation by Shelton or any of the Shelton Personnel of the
transactions contemplated hereby or thereby.

     

     

    3.5            Shelton
Personnel.  All of Shelton’s members and managers are
identified on Schedule
A, which accurately sets forth each member’s membership percentage and
each manager’s management position with Shelton.  Each former Shelton
member or manager and each other technician, engineer, or other professional
currently or formerly employed by Shelton is identified on Schedule 3.5. Shelton has
previously delivered to Company complete and accurate copies, including all
amendments, of each confidentiality or intellectual property assignment
agreement signed by each such person in Shelton’s favor.

     

    3.6           Contributed
Assets.

     

    (a)           Schedule 3.6(a) lists all of
the Contributed Assets.  Company has at all times owned, and is
transferring good and marketable title to, each item of the Contributed Assets,
free and clear of any Encumbrance.  The title, serial or registration
number, date of filing, expiration date, and relevant jurisdiction with respect
to each item of Registered IP is set forth on Schedule
3.6(a).  Schedule 3.6(a) also
identifies each invention or unregistered mask work right or copyright included
in the Contributed Assets as to which Shelton is contemplating filing an
application for a patent or registration that has not been filed.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

       

    

    (b)           Each
Person not listed on Schedule A
or Schedule 3.5
that developed in whole or part, alone or jointly with any other person,
or otherwise at any time had any ownership right, claim, or interest to or in,
any item of Contributed Asset is identified on Schedule 3.6(b), together with
each agreement between such person and Shelton with respect to such Contributed
Asset.  Shelton has previously delivered to Company complete and
accurate copies, including all amendments, of each such agreement.

     

    (c)           None
of the Contributed Assets has violated, infringed, or misappropriated or is now
violating, infringing, or misappropriating any copyright, logo, mask work right,
patent, trademark, service mark, trade secret, or other proprietary right
belonging to any other person, and no person has made any assertion inconsistent
with the foregoing.  To the knowledge of the Shelton Personnel, no
person has violated, infringed, or misappropriated or is now violating,
infringing, or misappropriating any Contributed Asset or threatened to do
so.  None of the Contributed Assets is, or on account of the
transactions contemplated hereby would become, subject to any contractual
restriction on any use or disclosure thereof.

     

    (d)           None
of Shelton’s confidential information included in the Contributed Assets has
been used, divulged or appropriated for the benefit of any person, other than
Shelton or Company or to the detriment of Company.  Shelton has taken
reasonable security measures to protect the secrecy, confidentiality, and value
of its confidential information.

     

    ARTICLE
IV

    INDEMNIFICATION

     

    4.1           Shelton
and the Shelton Personnel (“Indemnitors”), jointly and severally, shall
indemnify Company and its affiliates and representatives (“Indemnitees”) from
and hold Indemnitees harmless with respect to any claim, cost, damage, expense,
liability, or loss, including attorneys’ fees and other legal costs or expenses,
arising out of any breach by any Indemnitor of any representation, warranty,
agreement, or covenant made by it or him or herein. Indemnitees shall give
prompt notice to Indemnitors of any claim or condition to which the foregoing
indemnification covenant relates.  At their election, Indemnitors may
control the defense of such claim, at their expense, and Indemnitees will not
settle any such claim without the consent of Indemnitors.

     

    ARTICLE
V

     

    5.1           Entire
Agreement.  This Agreement sets forth the entire agreement of
the parties with respect to the subject matter hereof.  No provision
of this Agreement may be explained or qualified by any prior or contemporaneous
understanding, negotiation, discussion, conduct, or course of conduct, and,
except as otherwise expressly stated herein, there is no condition precedent to
the effectiveness of any provision hereof.  No party has relied on any
representation, warranty, or agreement of any person in entering this Agreement,
except those expressly stated herein.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

       

    

    5.2           Counterparts; Facsimile
Signatures.  This Agreement may be executed in counterparts,
each of which shall constitute an original, but all of which shall constitute
one agreement.  This Agreement shall become effective upon delivery to
each party of an executed counterpart or the earlier delivery to each party of
original or signature pages transmitted electronically that together (but need
not individually) bear the signatures of all other parties.

     

    5.3           Notices.  Any
notice hereunder shall be sent in writing, addressed as specified below, and
shall be deemed given:  if by hand or recognized courier service, by
4:00PM on a business day, addressee’s day and time, on the date of delivery, and
otherwise on the first business day after such delivery; if by telecopier, on
the date that transmission is confirmed electronically, if by 4:00PM on a
business day, addressee’s day and time, and otherwise on the first business day
after the date of such confirmation; or five days after mailing by certified or
registered mail, return receipt requested.  Notices shall be addressed
to the respective parties as follows (excluding telephone numbers, which are for
convenience only), or to such other address as a party shall specify to the
others in accordance with these notice provisions (telephone numbers are for
convenience only):

     

    To
AEM,

     

    ATTN:
Tianfu Yang

    No. 9 Ha
Ping Xi Lu, Harbin Kai Fa Qu, Harbin, China 150060

    Telecopier: 86-0451-8611-6769

    Telephone:
86-0451-8611-6787

     

    To
Shelton

     

    ATTN:
Julie Chen

    1685 W.
Hamlin Road, Rochester Hills, MI 48309

    Telecopier:
248-233-6725

    Telephone:
248-703-2091

     

    5.4           Amendments; Waivers;
Remedies.

     

    (a)           This
Agreement cannot be amended, except by writing signed by Company, Shelton, and a
majority of the Shelton Personnel, or terminated orally or by course of
conduct.  No provision hereof can be waived, except by a writing
signed by the party against whom such waiver is to be enforced, and any such
waiver shall apply only in the particular instance in which such waiver shall
have been given.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

       

    

    (b)           Neither
any failure or delay in exercising any right or remedy hereunder or in requiring
satisfaction of any condition herein nor any course of dealing shall constitute
a waiver of or prevent any party from enforcing any right or remedy or from
requiring satisfaction of any condition.  No notice to or demand on a
party waives or otherwise affects any obligation of that party or impairs any
right of the party giving such notice or making such demand, including any right
to take any action without notice or demand not otherwise required by this
Agreement.  No exercise of any right or remedy with respect to a
breach of this Agreement shall preclude exercise of any other right or remedy,
as appropriate to make the aggrieved party whole with respect to such breach, or
subsequent exercise of any right or remedy with respect to any other
breach.

     

    (c)           Except
as otherwise expressly provided herein, no statement herein of any right or
remedy shall impair any other right or remedy stated herein or that otherwise
may be available.

     

    5.5           Governing
Law.  This Agreement shall be governed by and construed,
interpreted, and enforced in accordance with the laws of the State of Delaware,
without regard to choice or conflict of laws principles that would result in the
application of the substantive laws of any other jurisdiction.

     

    [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

    

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    IN
WITNESS WHEREOF, the Members have executed this Agreement, effective as of the
date first written above.

    

    

    
      
        	
                 

              	
                 

              	 
	 	 Julie
      Chen (fka: Julie Xie)	 
	 	 	 	 

      

      
        	 	 	 	 
	
                 

              	
                 

              	 
	 	 Shaotang
      Chen	 
	 	 	 	 
	 	 	 	 

      

      
        	 	
                ADVANCED
      ELECTRIC MOTORS, INC.

              	 
	 	 	 	 
	 	 	 	 
	
                 

              	
                By:
      

              	Tianfu
      Yang	 
	 	 	Title:
      Chairman of the Board	 
	 	 	 	 
	 	 	 	 

      

      
        	 	SHELTON TECHNOLOGY
      LLC	 
	 	 	 
	 	 	 	 
	
                 

              	
                By:
      

              	Julie
      Chen (fka: Julie Xie)	 
	 	 	Title:
      Managing Director	 
	 	 	 	 

      

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

    

     

    SCHEDULE
A

     

    Names,
Addresses, and Percentages of the Members

    With
Shelton Technology LLC

     

    As
of July 1, 2010

     

    

    
      	
              Name,
      Address, Telecopier

              Number and Telephone
      Number

            	
               

              Percentage

            
	 
      	 
      
	 
      	 
      
	
              Julie
      Chen (fka: Julie Xie)

              1685
      W. Hamlin Road

              Rochester
      Hills, MI 48309

              Telecopier:
      248-233-6725

              Telephone:
      248-703-2091

               

               

            	
              100%

            

    

    

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
3.5

     

    Former
Shelton Member or Manager and Technician, Engineer, or Other Professional
Currently or Formerly Employed by Shelton

     

    As
of July 1, 2010

     

    

    Julie
Chen (fka: Julie Xie)

    1685 W.
Hamlin Road

    Rochester
Hills, MI 48309

    Telecopier:
248-233-6725

    Telephone:
248-703-2091

     

     

     

    8

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00177-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00177-of-00352.parquet"}]]