Document:

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                                                                [EXECUTION COPY]

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                              COLLATERAL AGREEMENT

                                     made by

                            TENNECO AUTOMOTIVE INC.,
                   TENNECO AUTOMOTIVE OPERATING COMPANY INC.,
                      TENNECO INTERNATIONAL HOLDING CORP.,
                          TENNECO GLOBAL HOLDINGS INC.,
                              THE PULLMAN COMPANY,
                                 TMC TEXAS INC.
                                       and
                             CLEVITE INDUSTRIES INC.

                                   in favor of

                      WACHOVIA BANK, NATIONAL ASSOCIATION,
                               as Collateral Agent

                            Dated as of June 19, 2003

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                                TABLE OF CONTENTS

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SECTION 1.            DEFINED TERMS..............................................................................2

         1.1      Definitions....................................................................................2

         1.2      Other Definitional Provisions..................................................................6

SECTION 2.            [INTENTIONALLY OMITTED]....................................................................6

SECTION 3.            GRANT OF SECURITY INTEREST.................................................................6

SECTION 4.            REPRESENTATIONS AND WARRANTIES.............................................................7

         4.1      Title; No Other Liens..........................................................................7

         4.2      Second Priority Liens..........................................................................7

         4.3      Jurisdiction of Organization...................................................................8

         4.4      Inventory and Equipment........................................................................8

         4.5      Farm Products..................................................................................8

         4.6      Investment Property............................................................................8

         4.7      Receivables....................................................................................8

         4.8      Intellectual Property..........................................................................8

SECTION 5.            COVENANTS..................................................................................9

         5.1      Delivery of Instruments, Certificated Securities and Chattel Paper.............................9

         5.2      Maintenance of Insurance.......................................................................9

         5.3      Payment of Secured Obligations................................................................10

         5.4      Maintenance of Perfected Security Interest; Further Documentation.............................10

         5.5      Changes in Jurisdiction of Organization, Location, Name, etc..................................10

         5.6      Notices.......................................................................................11

         5.7      Investment Property...........................................................................11

         5.8      Receivables...................................................................................12

         5.9      Intellectual Property.........................................................................12

         5.10     Jurisdiction of Organization..................................................................14

         5.11     Commercial Tort Claims........................................................................14

SECTION 6.            REMEDIAL PROVISIONS.......................................................................14

         6.1      Certain Matters Relating to Receivables.......................................................14

         6.2      Communications with Obligors; Grantors Remain Liable..........................................15

         6.3      Pledged Stock.................................................................................15
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                                TABLE OF CONTENTS
                                   (continued)

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         6.4      Proceeds to be Turned Over To Collateral Agent................................................16

         6.5      Application of Proceeds.......................................................................17

         6.6      Code and Other Remedies.......................................................................17

         6.7      Registration Rights...........................................................................18

         6.8      Deficiency....................................................................................19

SECTION 7.            THE COLLATERAL AGENT......................................................................19

         7.1      Collateral Agent's Appointment as Attorney-in-Fact, etc.......................................19

         7.2      Duty of Collateral Agent......................................................................20

         7.3      Execution of Financing Statements.............................................................21

         7.4      Authority of Collateral Agent.................................................................21

SECTION 8.            MISCELLANEOUS.............................................................................21

         8.1      Amendments in Writing.........................................................................21

         8.2      Notices.......................................................................................21

         8.3      No Waiver by Course of Conduct; Cumulative Remedies...........................................22

         8.4      [Intentionally Omitted].......................................................................22

         8.5      Successors and Assigns........................................................................22

         8.6      Set-Off.......................................................................................22

         8.7      Counterparts..................................................................................23

         8.8      Severability..................................................................................23

         8.9      Section Headings..............................................................................23

         8.10     Integration...................................................................................23

         8.11     Governing Law; Submission To Jurisdiction.....................................................23

         8.12     Acknowledgments...............................................................................24

         8.13     Additional Grantors...........................................................................24

         8.14     Releases......................................................................................24

         8.15     Intercreditor Agreement.......................................................................25
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                                TABLE OF CONTENTS
                                   (continued)

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SCHEDULES

Schedule 1        Notice Addresses of Guarantors
Schedule 2        Description of Investment Property
Schedule 3        Filings and Other Actions Required to Perfect Security Interests
Schedule 4        Location of Jurisdiction of Organization and Chief Executive Office
Schedule 5        Location of Inventory and Equipment
Schedule 6        Intellectual Property
Schedule 7        Commercial Tort Claims

ANNEXES

Annex 1           Assumption Agreement
Annex 1-A         Supplements to Schedules 1-7
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                              COLLATERAL AGREEMENT

         COLLATERAL AGREEMENT, dated as of June 19, 2003, made by each of the
signatories hereto (together with any other entity that may become a party
hereto as provided herein, the "Grantors"), in favor of WACHOVIA BANK, NATIONAL
ASSOCIATION, as Collateral Agent (in such capacity, the "Collateral Agent") for
the Holders (as defined in the Indenture described below).

                                   WITNESSETH:

         WHEREAS, pursuant to the Indenture, dated as of the date hereof (as
amended, supplemented or otherwise modified from time to time, the "Indenture"),
among Tenneco Automotive Inc., a Delaware corporation (the "Company"), as
issuer, the Subsidiaries (such term, and all other capitalized terms used
herein, as defined and otherwise referenced pursuant to Section 1.1) of the
Company party thereto as guarantors, and Wachovia Bank, National Association, as
Trustee (the "Trustee"), the Company has duly authorized the issue of 10.25%
Senior Secured Notes due 2013, Series A, and 10.25% Senior Secured Notes due
2013, Series B (as further defined in the Indenture, the "Securities");

         WHEREAS, as a condition precedent to the issuance of the Securities,
the Company has entered into an Intercreditor Agreement, dated as of the date
hereof (as amended, supplemented or otherwise modified from time to time, the
"Intercreditor Agreement"), among the Company, the Collateral Agent, the
Trustee, and JPMorgan Chase Bank, as administrative agent (as further defined in
the Indenture, the "Credit Agent") under the Credit Agreement dated as of
September 30, 1999, as amended, among the Company, the lenders party thereto in
their capacities as lenders thereunder and Commerzbank, AG and Bank of America,
N.A., as co-documentation agents, Citibank, N.A., as syndication agent and the
Credit Agent, as administrative agent;

         WHEREAS, the Company is a member of an affiliated group of companies
that includes each other Grantor;

         WHEREAS, the proceeds from the issuance of the Securities will be used
in part to enable the Company to make valuable transfers to one or more of the
other Grantors in connection with the operation of their respective businesses
and to repay certain indebtedness of the Company that is guaranteed by the
Guarantors;

         WHEREAS, the Company and the other Grantors are engaged in related
businesses, and each Grantor will derive substantial direct and indirect benefit
from the proceeds from the issuance of the Securities; and

         WHEREAS, it is a condition precedent to the issuance of the Securities
that the Grantors shall have executed and delivered this Agreement to the
Collateral Agent, for its benefit and the ratable benefit of the Trustee and the
Holders;

         NOW, THEREFORE, in consideration of the premises and to induce the
Holders to purchase the Securities, each Grantor hereby agrees with the
Collateral Agent, for its benefit and the ratable benefit of the Trustee and the
Holders, as follows:

<PAGE>

                            SECTION 1. DEFINED TERMS

         1.1 Definitions. (a) Unless otherwise defined herein, terms defined in
the Indenture and used herein shall have the meanings given to them in the
Indenture, and the following terms are used herein as defined in the New York
UCC: Accounts, Certificated Security, Chattel Paper, Commercial Tort Claims,
Documents, Equipment, Farm Products, Instruments, Inventory, Letter of Credit
Rights and Supporting Obligations.

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

                  "Agreement": this Collateral Agreement, as the same may be
         amended, supplemented or otherwise modified from time to time.

                  "Applicable Value": the aggregate principal amount, par value,
         book value as carried by the Company or market value, whichever is
         greatest, of any securities (as such term is used for purposes of Rules
         3-10 and 3-16 of Regulation S-X under the Securities Act, or any
         similar replacement rule or regulation) of any Subsidiary of the
         Company.

                  "Collateral":  as defined in Section 3.

                  "Collateral Account": any collateral account established by
         the Collateral Agent as provided in Section 6.1 or 6.4.

                  "Company Obligations": the collective reference to the unpaid
         principal of and interest on the Securities and all other obligations
         and liabilities of the Company (including, without limitation, interest
         accruing at the applicable default rate provided in the Indenture and
         interest accruing at the rate provided in the Indenture after the
         filing of any petition in bankruptcy, or the commencement of any
         insolvency, reorganization or like proceeding, relating to the Company,
         whether or not a claim for post-filing or post-petition interest is
         allowed in such proceeding) to the Trustee or the Collateral Agent or
         any Holder of the Securities, whether direct or indirect, absolute or
         contingent, due or to become due, or now existing or hereafter
         incurred, which may arise under, out of, or in connection with, the
         Indenture, any other Specified Document or any other document made,
         delivered or given in connection with any of the foregoing, in each
         case whether on account of principal, interest, fees, indemnities,
         costs, expenses or otherwise (including, without limitation, all fees
         and disbursements of counsel to the Trustee or the Collateral Agent or
         to the Holders of the Securities that are required to be paid by the
         Company pursuant to the terms of any of the foregoing agreements).

                  "Copyrights": (i) all copyrights arising under the laws of the
         United States, any other country or any political subdivision thereof,
         whether registered or unregistered and whether published or unpublished
         (including, without limitation, those listed in Schedule 6), all
         registrations and recordings thereof, and all applications in
         connection therewith, including, without limitation, all registrations,
         recordings and applications in the United States Copyright Office, and
         (ii) the right to obtain all renewals thereof.

                  "Copyright Licenses": any written agreement naming any Grantor
         as licensor or any written agreement naming any Grantor as licensee to
         the extent such agreement

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         permits the Grantor to grant a security interest in its rights
         thereunder, including, without limitation, those listed in Schedule 6,
         granting any right under any Copyright, including, without limitation,
         the grant of rights to manufacture, distribute, exploit and sell
         materials derived from any Copyright.

                  "Deposit Account": as defined in the Uniform Commercial Code
         of any applicable jurisdiction and, in any event, including, without
         limitation, any demand, time, savings, passbook or like account
         maintained with a depositary institution.

                  "Discharge of First Priority Claims": as defined in the
         Intercreditor Agreement.

                  "Excluded Collateral": the collective reference to: (i) any
         property or assets owned by any Foreign Subsidiary, Immaterial Domestic
         Subsidiary, Accounts Receivable Entity or Finance Subsidiary; (ii) any
         Capital Stock of any Foreign Subsidiary of the Company; (iii) any real
         property and real property leases (domestic or foreign); (iv) all
         securities (as such term is used for purposes of Rules 3-10 and 3-16 of
         Regulation S-X under the Securities Act, or any similar replacement
         rule or regulation) of any Domestic Restricted Subsidiary to the extent
         the Applicable Value of such securities (on a Subsidiary by Subsidiary
         basis) is equal to or greater than 20% of the then aggregate principal
         amount of the Securities then outstanding; and (v) all proceeds and
         products from any and all of the foregoing excluded Collateral
         described in clauses (i) through (iv), unless such proceeds or products
         would otherwise constitute Collateral without regard to the preceding
         clauses (i) through (iv); provided, however, in the event that Rule
         3-10 or Rule 3-16 of Regulation S-X under the Securities Act is
         amended, modified or interpreted by the SEC to require (or is replaced
         with another rule or regulation, or any other law, rule or regulation
         is adopted, which would require) the filing with the SEC (or any other
         governmental agency) of separate financial statements of any Domestic
         Restricted Subsidiary of the Company due to the fact that such Domestic
         Restricted Subsidiary's securities secure the Securities, then the
         securities of such Grantor shall automatically be deemed not to be part
         of the Collateral for which the Collateral Agent, the Trustee or the
         Holders have a security interest and shall automatically be deemed to
         be part of the Excluded Collateral but only to the extent necessary to
         not be subject to such requirement. In such event, the applicable
         Security Documents shall be deemed to be amended or modified to include
         as Excluded Collateral the Domestic Restricted Subsidiary's securities
         that are so deemed to no longer constitute part of the Collateral. In
         the event that Rule 3-16 or Rule 3-10 of Regulation S-X under the
         Securities Act is amended, modified or interpreted by the SEC to permit
         (or are replaced with another rule or regulation, or any other law,
         rule or regulation is adopted, which would permit) such Domestic
         Restricted Subsidiary's Capital Stock and other securities to secure
         the Securities in excess of the amount then pledged without the filing
         with the SEC (or any other governmental agency) of separate financial
         statements of such Domestic Restricted Subsidiary, then the Capital
         Stock and other securities of such Subsidiary shall automatically be
         deemed to be a part of the Collateral but only to the extent necessary
         to not be subject to any such financial statement requirement.

                  "Foreign Subsidiary": any Subsidiary organized under the laws
         of any jurisdiction outside the United States of America.

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                  "General Intangibles": all "general intangibles" as such term
         is defined in Section 9-102(a)(42) of the New York UCC and, in any
         event, including, without limitation, with respect to any Grantor, all
         contracts, agreements, instruments and indentures in any form, and
         portions thereof, to which such Grantor is a party or under which such
         Grantor has any right, title or interest or to which such Grantor or
         any property of such Grantor is subject, as the same may from time to
         time be amended, supplemented or otherwise modified, including, without
         limitation, (i) all rights of such Grantor to receive moneys due and to
         become due to it thereunder or in connection therewith, (ii) all rights
         of such Grantor to damages arising thereunder and (iii) all rights of
         such Grantor to perform and to exercise all remedies thereunder.

                  "Guarantor Obligations": with respect to any Guarantor, all
         obligations and liabilities of such Guarantor which may arise under or
         in connection with the Securities or otherwise under the Specified
         Documents.

                  "Guarantors": the collective reference to each Grantor other
         than the Company.

                  "Intellectual Property": the collective reference to all
         rights, priorities and privileges relating to intellectual property,
         whether arising under United States, multinational or foreign laws or
         otherwise, including, without limitation, the Copyrights, the Copyright
         Licenses, the Patents, the Patent Licenses, the Trademarks and the
         Trademark Licenses, and all rights to sue at law or in equity for any
         infringement or other impairment thereof, including the right to
         receive all proceeds and damages therefrom.

                  "Intercompany Note": any promissory note evidencing loans made
         by any Grantor to the Company or any of its Subsidiaries.

                  "Investment Property": the collective reference to (i) all
         "investment property" as such term is defined in Section 9-102(a)(49)
         of the New York UCC and (ii) whether or not constituting "investment
         property" as so defined, all Pledged Notes and all Pledged Stock.

                  "Issuers": the collective reference to each issuer of any
         Investment Property.

                  "New York UCC": the Uniform Commercial Code as from time to
         time in effect in the State of New York.

                  "Patents": (i) all letters patent of the United States, any
         other country or any political subdivision thereof, all reissues and
         extensions thereof and all goodwill associated therewith, including,
         without limitation, any of the foregoing referred to in Schedule 6,
         (ii) all applications for letters patent of the United States or any
         other country and all divisions, continuations and
         continuations-in-part thereof, including, without limitation, any of
         the foregoing referred to in Schedule 6, and (iii) all rights to obtain
         any reissues or extensions of the foregoing.

                  "Patent License": all agreements, whether written or oral,
         providing for (i) the grant by any Grantor of any right to manufacture,
         use or sell any invention covered in whole or in part by a Patent and
         (ii) the grant to any Grantor of any right to manufacture,

                                      -4-
<PAGE>

         use or sell any invention covered in whole or in part by a Patent (to
         the extent such agreement permits the Grantor to grant a security
         interest in its rights thereunder), including, without limitation, any
         of the foregoing referred to in Schedule 6.

                  "Pledged Notes": all promissory notes listed on Schedule 2,
         all Intercompany Notes at any time issued to any Grantor and all other
         promissory notes issued to or held by any Grantor (other than
         promissory notes issued in connection with extensions of trade credit
         by any Grantor in the ordinary course of business).

                  "Pledged Stock": the shares of Capital Stock listed on
         Schedule 2, together with any other shares, stock certificates, options
         or rights of any nature whatsoever in respect of the Capital Stock of
         any Person that may be issued or granted to, or held by, any Grantor
         while this Agreement is in effect other than Capital Stock constituting
         Excluded Collateral.

                  "Proceeds": all "proceeds" as such term is defined in Section
         9-102(a)(64) of the New York UCC and, in any event, shall include,
         without limitation, all dividends or other income from the Investment
         Property, collections thereon or distributions or payments with respect
         thereto.

                  "Receivable": any right to payment for goods sold or leased or
         for services rendered, whether or not such right is evidenced by an
         Instrument or Chattel Paper and whether or not it has been earned by
         performance (including, without limitation, any Account).

                  "SEC": the Securities and Exchange Commission.

                  "Secured Obligations": (i) in the case of the Company, the
         Company Obligations, and (ii) in the case of each Guarantor, its
         Guarantor Obligations.

                  "Securities Act": the Securities Act of 1933, as amended.

                  "Specified Documents": collectively, the Indenture, the
         Securities and the Security Documents.

                  "Trademarks": (i) all trademarks, trade names, corporate
         names, company names, business names, fictitious business names, trade
         styles, service marks, logos and other source or business identifiers,
         and all goodwill associated therewith, now existing or hereafter
         adopted or acquired, all registrations and recordings thereof, and all
         applications in connection therewith, whether in the United States
         Patent and Trademark Office or in any similar office or agency of the
         United States, any State thereof or any other country or any political
         subdivision thereof, or otherwise, and all common-law rights related
         thereto, including, without limitation, any of the foregoing referred
         to in Schedule 6, and (ii) the right to obtain all renewals thereof.

                  "Trademark License": any agreement, whether written or oral,
         providing for (i) the grant by any Grantor of any right to use any
         Trademark and (ii) the grant to any Grantor of any right to use any
         Trademark (to the extent such agreement permits the

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         Grantor to grant a security interest in its rights thereunder),
         including, without limitation, any of the foregoing referred to in
         Schedule 6.

         1.2 Other Definitional Provisions. (a) The words "hereof," "herein",
"hereto" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement, and Section and Schedule references are to this Agreement unless
otherwise specified.

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

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

                       SECTION 2. [INTENTIONALLY OMITTED]

                     SECTION 3. GRANT OF SECURITY INTEREST

         (a) Subject to clause (b) of this Section 3, each Grantor hereby
assigns and transfers to the Collateral Agent, and hereby grants to the
Collateral Agent, for its benefit and the ratable benefit of the Trustee and the
Holders, a security interest in, all of the following property now owned or at
any time hereafter acquired by such Grantor or in which such Grantor now has or
at any time in the future may acquire any right, title or interest
(collectively, the "Collateral"), as collateral security for the prompt and
complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of such Grantor's Secured Obligations (it being
understood and agreed that the security interest granted herein for the benefit
of the Collateral Agent on behalf of the Holders shall be subject to the
subordination terms of the Intercreditor Agreement):

                  (i) all Accounts;

                  (ii) all Chattel Paper;

                  (iii) all Deposit Accounts;

                  (iv) all Documents;

                  (v) all Equipment;

                  (vi) all General Intangibles;

                  (vii) all Instruments;

                  (viii) all Intellectual Property;

                  (ix) all Inventory;

                  (x) all Investment Property;

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                  (xi) all Letter of Credit Rights;

                  (xii) all Commercial Tort Claims in an amount in excess of
         $500,000 in which any Grantor has rights, as set forth on Schedule 7;

                  (xiii) all other property not otherwise described above;

                  (xiv) all books and records pertaining to the Collateral; and

                  (xv) to the extent not otherwise included, all Proceeds,
         Supporting Obligations and products of any and all of the foregoing and
         all collateral security and guarantees given by any Person with respect
         to any of the foregoing.

         (b) Notwithstanding anything to the contrary contained in this
Agreement, neither the Collateral Agent nor any of the Holders shall have a
security interest in, and the grant of security interests pursuant to this
Section 3 for the benefit of the Collateral Agent on behalf of the Holders shall
not extend to, any Excluded Collateral, and with respect to the Trustee, the
Collateral Agent and the Holders the term "Collateral" shall not include the
Excluded Collateral.

                    SECTION 4. REPRESENTATIONS AND WARRANTIES

         To induce the Holders to purchase the Securities, each Grantor hereby
represents and warrants to the Collateral Agent and each Holder that:

         4.1 Title; No Other Liens. Except (i) as set forth on Schedule 6, (ii)
for the First Priority Liens, (iii) for the security interest granted to the
Collateral Agent for its benefit and the ratable benefit of the Trustee and the
Holders pursuant to this Agreement and (iv) for the other Liens permitted to
exist on the Collateral by the Indenture, such Grantor owns each item of the
Collateral free and clear of any and all Liens or claims of others. Except with
respect to financing statements and other public notices filed with respect to
the First Priority Liens, no financing statement or other public notice with
respect to all or any part of the Collateral is on file or of record in any
public office, except such (a) as have been filed in favor of the Collateral
Agent, for its benefit and the ratable benefit of the Trustee and the Holders,
pursuant to this Agreement or (b) as are permitted by the Indenture.

         4.2 Second Priority Liens. The security interests granted pursuant to
this Agreement (a) upon completion of the filings and other actions specified on
Schedule 3 (which, in the case of all filings and other documents referred to on
said Schedule, have been delivered to the Collateral Agent in completed and,
when required, duly executed form unless otherwise referred to in such Schedule)
will constitute valid perfected security interests in all of the Collateral (to
the extent a perfected security interest is required pursuant to this Agreement,
and except as otherwise stated on Schedule 3) in favor of the Collateral Agent,
for its benefit and the ratable benefit of the Trustee and the Holders, as
collateral security for such Grantor's Secured Obligations, enforceable in
accordance with the terms hereof against all creditors of such Grantor and any
Persons purporting to purchase any Collateral from such Grantor and (b) are
prior to all other Liens on the Collateral in existence on the date hereof
except the First Priority Liens, the Liens permitted by the Indenture and except
for unrecorded Liens permitted by the Indenture which have priority over the
Liens on the Collateral by operation of law. The stock certificates

                                      -7-
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described on Schedule 2 have been delivered to the Credit Agent, each together
with a duly executed stock power.

         4.3 Jurisdiction of Organization. On the date hereof, such Grantor's
jurisdiction of organization, identification number from such jurisdiction of
organization (if any) and the location of such Grantor's chief executive office
or sole place of business are specified on Schedule 4.

         4.4 Inventory and Equipment. On the date hereof, the Inventory and the
Equipment (other than mobile goods) are kept at the locations listed on Schedule
5.

         4.5 Farm Products. None of the Collateral constitutes, or is the
Proceeds of, Farm Products.

         4.6 Investment Property. (a) The shares of Pledged Stock constituting
Collateral and pledged by such Grantor hereunder have been duly and validly
issued and are fully paid and nonassessable.

         (b) Each of the Pledged Notes constitutes the legal, valid and binding
obligation of the obligor with respect thereto, enforceable in accordance with
its terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing.

         (c) Such Grantor is the record and beneficial owner of, and has good
and marketable title to, the Investment Property pledged by it hereunder, free
of any and all Liens or options in favor of, or claims of, any other Person,
except the First Priority Liens, the security interest created by this Agreement
and Liens permitted under the Indenture.

         4.7 Receivables. (a) No amount payable to such Grantor under or in
connection with any Receivable is evidenced by any Instrument or Chattel Paper
which has not been delivered to the Credit Agent or, following the Discharge of
First Priority Claims and subject to the terms of the Intercreditor Agreement,
to the Collateral Agent, except for any of the foregoing to the extent subject
to and included in Permitted Receivables Financing.

         (b) None of the obligors on any Receivables is a governmental
authority.

         (c) The amounts represented by such Grantor to the Holders from time to
time as owing to such Grantor in respect of the Receivables will at such times
be accurate.

         4.8 Intellectual Property. (a) Except as otherwise set forth on such
Schedule, Schedule 6 lists all registered, and all material unregistered,
Intellectual Property owned by such Grantor in its own name on the date hereof
and all applications to register any such Intellectual Property.

         (b) On the date hereof, all material Intellectual Property is valid,
subsisting, unexpired and enforceable, has not been abandoned and does not
infringe the intellectual property rights of any other Person.

                                      -8-
<PAGE>

         (c) Except as set forth in Schedule 6, on the date hereof, none of the
material Intellectual Property is the subject of any licensing or franchise
agreement pursuant to which such Grantor is the licensor or franchisor.

         (d) No holding, decision or judgment has been rendered by any
governmental authority which would limit, cancel or question the validity of, or
such Grantor's rights in, any Intellectual Property in any respect that would
reasonably be expected in the aggregate to have a material adverse effect on the
business, property, operations or condition (financial or otherwise) of the
Company and its Subsidiaries taken as a whole.

         (e) No action or proceeding is pending, or, to the knowledge of such
Grantor, threatened, on the date hereof (i) seeking to limit, cancel or question
the validity of any Intellectual Property or such Grantor's ownership interest
therein, or (ii) which, if adversely determined, would have a material adverse
effect on the value of any material Intellectual Property.

                              SECTION 5. COVENANTS

         Each Grantor covenants and agrees with the Collateral Agent and the
Holders that, from and after the date of this Agreement until the Secured
Obligations shall have been paid in full:

         5.1 Delivery of Instruments, Certificated Securities and Chattel Paper.
Following the Discharge of First Priority Claims and subject to the terms of the
Intercreditor Agreement, if any amount payable under or in connection with any
of the Collateral in excess of $500,000 shall be or become evidenced by any
Instrument, Certificated Security or Chattel Paper, such Instrument,
Certificated Security or Chattel Paper (in each case following receipt thereof
by such Grantor from the Credit Agent, if in the possession of the Credit Agent
or its agent prior to the Discharge of First Priority Claims) shall be
immediately delivered to the Collateral Agent, duly indorsed in a manner
satisfactory to the Collateral Agent, to be held as Collateral pursuant to this
Agreement, except to the extent any of the foregoing is subject to and included
in a Permitted Receivables Financing.

         5.2 Maintenance of Insurance. (a) Such Grantor will maintain, with
financially sound and reputable companies with A.M. Best ratings of A-III or
better, (i) insurance policies insuring the Inventory and Equipment against loss
by fire, explosion, theft and such other casualties and (ii) insurance policies
insuring such Grantor, the Collateral Agent, the Trustee and the Holders against
liability for personal injury and property damage relating to such Inventory and
Equipment, in both cases as is normal and customary for the automotive parts
industry.

         (b) All such insurance shall (i) provide that no cancellation, material
reduction in amount or material change in coverage thereof shall be effective
until at least 30 days after receipt by the Collateral Agent of written notice
thereof and (ii) name the Collateral Agent as insured party (with respect to
liability insurance) and, subject to the terms of the Intercreditor Agreement,
as additional loss payee with respect to other insurance as its interests may
appear.

         (c) The Company shall deliver to the Collateral Agent a report of a
reputable insurance broker with respect to such insurance substantially
concurrently with each delivery to the Trustee of the compliance certificate
required pursuant to Section 4.08(a) of the Indenture and such

                                      -9-
<PAGE>

supplemental reports with respect thereto as the Collateral Agent may from time
to time reasonably request.

         5.3 Payment of Secured Obligations. Such Grantor will pay and discharge
or otherwise satisfy at or before maturity or before they become delinquent, as
the case may be, all taxes, assessments and governmental charges or levies
imposed upon the Collateral or in respect of income or profits therefrom, as
well as all claims of any kind (including, without limitation, claims for labor,
materials and supplies) against or with respect to the Collateral, except that
no such charge need be paid if the amount or validity thereof is currently being
contested in good faith by appropriate proceedings, reserves in conformity with
GAAP with respect thereto have been provided on the books of such Grantor and
such proceedings would not reasonably be expected to result in the sale,
forfeiture or loss of any material portion of the Collateral or any interest
therein.

         5.4 Maintenance of Perfected Security Interest; Further Documentation.
(a) Such Grantor shall maintain the security interest created by this Agreement
as a perfected security interest having at least the priority and perfection
described in Section 4.2 and shall defend such security interest against the
claims and demands of all Persons whomsoever, other than the holders of the
First Priority Liens and other Liens permitted by the Indenture.

         (b) Such Grantor will furnish to the Collateral Agent and the Holders
from time to time statements and schedules further identifying and describing
the assets and property of such Grantor constituting Collateral and such other
reports in connection therewith as the Collateral Agent may reasonably request,
all in reasonable detail.

         (c) Subject to the priority of the First Priority Liens and subject to
the terms of the Intercreditor Agreement, at any time and from time to time,
upon the written request of the Collateral Agent, and at the sole expense of
such Grantor, such Grantor will promptly and duly execute and deliver, and have
recorded, such further instruments and documents and take such further actions
as the Collateral Agent may reasonably request for the purpose of obtaining or
preserving the full benefits of this Agreement and of the rights and powers
herein granted, including, without limitation, (i) filing any financing or
continuation statements under the Uniform Commercial Code (or other similar
laws) in effect in any applicable jurisdiction with respect to the security
interests created hereby and (ii) as soon as reasonably practicable following
the Discharge of First Priority Claims, in the case of Investment Property,
Deposit Accounts and any other relevant Collateral, taking any actions necessary
to enable the Collateral Agent to obtain "control" (within the meaning of the
applicable Uniform Commercial Code) with respect thereto.

         5.5 Changes in Jurisdiction of Organization, Location, Name, etc. Such
Grantor will not, except upon 15 days' prior written notice to the Collateral
Agent and delivery to the Collateral Agent of all additional financing
statements and other documents (executed where required) reasonably requested by
the Collateral Agent to maintain the validity, perfection and priority of the
security interests provided for herein:

                                      -10-
<PAGE>

                  (i) change its jurisdiction of organization or, if such
         Grantor does not have a jurisdiction of organization for purposes of
         the New York UCC, the location of its chief executive office or sole
         place of business from that referred to in Section 4.3; or

                  (ii) change its name.

         5.6 Notices. Such Grantor will advise the Collateral Agent promptly, in
reasonable detail, of:

                  (a) any Lien (other than First Priority Liens, security
         interests created hereby or Liens permitted under the Indenture) on any
         of the Collateral which would adversely affect the ability of the
         Collateral Agent to exercise any of its remedies hereunder; and

                  (b) the occurrence of any other event which would reasonably
         be expected to have a material adverse effect on the aggregate value of
         the Collateral or on the security interests created hereby.

         5.7 Investment Property. (a) Following the Discharge of First Priority
Claims and subject to the terms of the Intercreditor Agreement, if such Grantor
shall become entitled to receive or shall receive any stock certificate
(including, without limitation, any certificate representing a stock dividend or
a distribution in connection with any reclassification, increase or reduction of
capital or any certificate issued in connection with any reorganization), option
or rights in respect of the Capital Stock of any Issuer that would constitute
Collateral hereunder, whether in addition to, in substitution of, as a
conversion of, or in exchange for, any shares of the Pledged Stock, or otherwise
in respect thereof, such Grantor shall accept the same as the agent of the
Collateral Agent and the Holders, hold the same in trust for the Collateral
Agent and the Holders and deliver the same forthwith to the Collateral Agent in
the exact form received, duly indorsed by such Grantor to the Collateral Agent,
if required, together with an undated stock power covering such certificate duly
executed in blank by such Grantor and with, if the Collateral Agent so requests,
signature guaranteed, to be held by the Collateral Agent, subject to the terms
hereof, as additional collateral security for the Secured Obligations. Except as
otherwise provided in the Indenture, any sums paid upon or in respect of the
Investment Property that constitutes Collateral upon the liquidation or
dissolution of any Issuer shall be paid over to the Collateral Agent to be held
by it hereunder as additional collateral security for the Secured Obligations,
and in case any distribution of capital shall be made on or in respect of such
Investment Property or any property shall be distributed upon or with respect to
such Investment Property pursuant to the recapitalization or reclassification of
the capital of any Issuer or pursuant to the reorganization thereof, the
property so distributed shall, unless otherwise subject to a perfected security
interest in favor of the Collateral Agent and to the extent it would constitute
Collateral hereunder, be delivered to the Collateral Agent to be held by it
hereunder as additional collateral security for the Secured Obligations. If any
sums of money or property so paid or distributed in respect of the Investment
Property that constitutes Collateral shall be received by such Grantor, such
Grantor shall, until such money or property is paid or delivered to the
Collateral Agent, hold such money or property in trust for the Holders,
segregated from other funds of such Grantor, as additional collateral security
for the Secured Obligations.

                                      -11-
<PAGE>

         (b) Following the Discharge of First Priority Claims and subject to the
terms of the Intercreditor Agreement, without the prior written consent of the
Collateral Agent, such Grantor will not (i) vote to enable, or take any other
action to permit, any Issuer to issue any stock or other equity securities of
any nature or to issue any other securities convertible into or granting the
right to purchase or exchange for any stock or other equity securities of any
nature of any Issuer (except pursuant to a transaction expressly permitted by
the Indenture), (ii) sell, assign, transfer, exchange, or otherwise dispose of,
or grant any option with respect to, the Investment Property that constitutes
Collateral or Proceeds thereof (except pursuant to a transaction expressly
permitted by the Indenture), (iii) create, incur or permit to exist any Lien or
option in favor of, or any claim of any Person with respect to, any of the
Investment Property that constitutes Collateral or Proceeds thereof, or any
interest therein, except for the security interests created by this Agreement or
permitted by the Indenture or (iv) enter into any agreement or undertaking
restricting the right or ability of such Grantor or the Collateral Agent to
sell, assign or transfer any of the Investment Property that constitutes
Collateral or Proceeds thereof.

         (c) Following the Discharge of First Priority Claims and subject to the
terms of the Intercreditor Agreement, in the case of each Grantor which is an
Issuer, such Issuer agrees that (i) it will be bound by the terms of this
Agreement relating to the Investment Property that constitutes Collateral and
was issued by it and will comply with such terms insofar as such terms are
applicable to it, (ii) it will notify the Collateral Agent promptly in writing
of the occurrence of any of the events described in Section 5.7(a) with respect
to the Investment Property that constitutes Collateral and was issued by it and
(iii) the terms of Sections 6.3(c) and 6.7 shall apply to it, mutatis mutandis,
with respect to all actions that may be required of it pursuant to Section
6.3(c) or 6.7 with respect to the Investment Property that constitutes
Collateral and was issued by it.

         5.8 Receivables. (a) Other than in the ordinary course of business
consistent with its past practice, such Grantor will not (i) grant any extension
of the time of payment of any Receivable, (ii) compromise or settle any
Receivable for less than the full amount thereof, (iii) release, wholly or
partially, any Person liable for the payment of any Receivable, (iv) allow any
credit or discount whatsoever on any Receivable or (v) amend, supplement or
modify any Receivable in any manner that could adversely affect the value
thereof.

         (b) Such Grantor will deliver to the Collateral Agent a copy of each
material demand, notice or document received by it that questions or calls into
doubt the validity or enforceability of more than 5% of the aggregate amount of
the then outstanding Receivables. The Collateral Agent shall furnish a copy of
each such demand, notice or document to the Trustee, and the Trustee may, but
shall not be required to, furnish a copy to the Holders.

         5.9 Intellectual Property. (a) Such Grantor (either itself or through
licensees) will (i) continue to use each material Trademark on each and every
trademark class of goods applicable to its current line as reflected in its
current catalogs, brochures and price lists in order to maintain such Trademark
in full force free from any claim of abandonment for non-use, (ii) maintain as
in the past the quality of products and services offered under such Trademark,
(iii) use such Trademark with the appropriate notice of registration and all
other notices and legends required by applicable law, (iv) not adopt or use any
mark which is confusingly similar or a colorable imitation of such Trademark
unless the Collateral Agent, for its benefit and the ratable benefit of

                                      -12-
<PAGE>

the Trustee and the Holders, shall obtain a perfected security interest in such
mark (to the extent a security interest in such mark may be perfected by filing
under the applicable Uniform Commercial Code, or similar law in a foreign
jurisdiction, or with the US Patent and Trademark Office, or corresponding
foreign office, and to the extent requested pursuant to clause (f) below)
pursuant to this Agreement, and (v) not (and not permit any licensee or
sublicensee thereof to) do any act or knowingly omit to do any act whereby such
Trademark may become invalidated or impaired in any way.

         (b) Such Grantor (either itself or through licensees) will not do any
act, or omit to do any act, whereby any material Patent may become forfeited,
abandoned or dedicated to the public.

         (c) Such Grantor (either itself or through licensees) (i) will employ
each material Copyright and (ii) will not (and will not permit any licensee or
sublicensee thereof to) do any act or knowingly omit to do any act whereby any
material portion of the Copyrights may become invalidated or otherwise impaired.
Such Grantor will not (either itself or through licensees) do any act whereby
any material portion of the Copyrights may fall into the public domain.

         (d) Such Grantor (either itself or through licensees) will not do any
act that knowingly uses any material Intellectual Property to infringe the
intellectual property rights of any other Person.

         (e) Such Grantor will notify the Collateral Agent immediately if it
knows, or has reason to know, that any application or registration relating to
any material Intellectual Property may become forfeited, abandoned or dedicated
to the public, or of any adverse determination or development (including,
without limitation, the institution of, or any such determination or development
in, any proceeding in the United States Patent and Trademark Office, the United
States Copyright Office or any court or tribunal in any country) regarding such
Grantor's ownership of, or the validity of, any material Intellectual Property
subject to such an application or registration or such Grantor's right to
register the same or to own and maintain the same. The Collateral Agent shall
provide a copy of such notice to the Trustee, and the Trustee may, but shall not
be required to, provide a copy of such notice to the Holders.

         (f) Whenever such Grantor, either by itself or through any agent,
employee, licensee or designee, shall file an application for the registration
of any Intellectual Property with the United States Patent and Trademark Office,
the United States Copyright Office or any similar office or agency in any other
country or any political subdivision thereof, such Grantor shall report such
filing to the Collateral Agent within five Business Days after the last day of
the fiscal quarter in which such filing occurs. Such Grantor shall execute and
deliver, and have recorded, any and all agreements, instruments, documents, and
papers as shall be required to evidence the Collateral Agent's and the Holders'
security interest in any Copyright registered with the United States Copyright
Office or any Patent or Trademark registered with the United States Patent and
Trademark Office, and the goodwill (if applicable) and general intangibles of
such Grantor relating thereto or represented thereby.

         (g) Such Grantor will take all reasonable and necessary steps,
including, without limitation, in any proceeding before the United States Patent
and Trademark Office, the United States Copyright Office or any similar office
or agency in any other country or any political

                                      -13-
<PAGE>

subdivision thereof, to maintain and pursue each application (and to obtain the
relevant registration) and to maintain each registration of the material
registered Intellectual Property, including, without limitation, filing of
applications for renewal, affidavits of use and affidavits of incontestability.

         (h) In the event that any material Intellectual Property is infringed,
misappropriated or diluted by a third party, such Grantor shall (i) take such
actions as such Grantor shall reasonably deem appropriate under the
circumstances to protect such Intellectual Property and (ii) if such
Intellectual Property is of material economic value, promptly notify the
Collateral Agent after it learns thereof and sue for infringement,
misappropriation or dilution, to seek injunctive relief where appropriate and to
recover any and all damages for such infringement, misappropriation or dilution.

         5.10 Jurisdiction of Organization. At the Collateral Agent's request,
each Grantor will provide its jurisdiction of organization, identification
number from the jurisdiction of organization (if any), and the location of such
Grantor's chief executive office or sole place of business. In addition, the
Collateral Agent may request, and such Grantor shall provide, a certified
charter, certificate of incorporation, or other organizational document and long
form good standing certificate from each Grantor.

         5.11 Commercial Tort Claims. Such Grantor will advise the Collateral
Agent of such Grantor's interest in any Commercial Tort Claim in an amount in
excess of $500,000 in which such Grantor believes it has rights, and such
Grantor shall promptly provide the Collateral Agent with an updated Schedule 7
describing such Commercial Tort Claim or such information with respect thereto
as may be required in order to attach and perfect a security interest therein in
accordance with applicable law.

                         SECTION 6. REMEDIAL PROVISIONS

         6.1 Certain Matters Relating to Receivables. (a) The Collateral Agent
shall have the right to make test verifications of the Receivables in any manner
and through any medium that it reasonably considers advisable, and each Grantor
shall furnish all such assistance and information as the Collateral Agent may
require in connection with such test verifications after the occurrence of an
Event of Default. At any time and from time to time, upon the Collateral Agent's
request and at the expense of the relevant Grantor, such Grantor shall cause
independent public accountants or others satisfactory to the Collateral Agent to
furnish to the Collateral Agent reports showing reconciliations, aging and test
verifications of, and trial balances for, the Receivables.

         (b) The Collateral Agent hereby authorizes each Grantor to collect such
Grantor's Receivables, subject to the Collateral Agent's direction and control
following the Discharge of First Priority Claims and subject to the terms of the
Intercreditor Agreement, and following the Discharge of First Priority Claims
and subject to the terms of the Intercreditor Agreement the Collateral Agent may
curtail or terminate said authority at any time after the occurrence and during
the continuance of an Event of Default. Following the Discharge of First
Priority Claims and subject to the terms of the Intercreditor Agreement, if
required by the Collateral Agent at any time after the occurrence and during the
continuance of an Event of Default, any payments of

                                      -14-
<PAGE>

Receivables, when collected by any Grantor, (i) shall be forthwith (and, in any
event, within two Business Days) deposited by such Grantor in the exact form
received, duly indorsed by such Grantor to the Collateral Agent if required, in
a Collateral Account maintained under the sole dominion and control of the
Collateral Agent, subject to withdrawal by the Collateral Agent for the account
of the Holders only as provided in Section 6.5, and (ii) until so turned over,
shall be held by such Grantor in trust for the Collateral Agent and the Holders,
segregated from other funds of such Grantor. Each such deposit of Proceeds of
Receivables shall be accompanied by a report identifying in reasonable detail
the nature and source of the payments included in the deposit.

         (c) Following the Discharge of First Priority Claims and subject to the
terms of the Intercreditor Agreement, at the Collateral Agent's request, each
Grantor shall deliver to the Collateral Agent all original and other documents
evidencing, and relating to, the agreements and transactions which gave rise to
the Receivables, including, without limitation, all original orders, invoices
and shipping receipts (in each case following receipt thereof by such Grantor
from the Credit Agent, if in the possession of the Credit Agent or its agent
prior to the Discharge of First Priority Claims).

         6.2 Communications with Obligors; Grantors Remain Liable. (a) Following
the Discharge of First Priority Claims, the Collateral Agent in its own name or
in the name of others may at any time after the occurrence and during the
continuance of an Event of Default communicate with obligors under the
Receivables and parties to any material contract of any Grantor to verify with
them to the Collateral Agent's satisfaction the existence, amount and terms of
any Receivables or any material contract of any Grantor.

         (b) Following the Discharge of First Priority Claims, upon the request
of the Collateral Agent at any time after the occurrence and during the
continuance of an Event of Default, each Grantor shall notify obligors on the
Receivables and parties to any material contract of any Grantor that the
Receivables and such contracts have been assigned to the Collateral Agent for
its benefit and the ratable benefit of the Trustee and the Holders and that
payments in respect thereof shall be made directly to the Collateral Agent.

         (c) Anything herein to the contrary notwithstanding, each Grantor shall
remain liable under each of the Receivables and material contracts of any
Grantor to observe and perform all the conditions and obligations to be observed
and performed by it thereunder, all in accordance with the terms of any
agreement giving rise thereto. Neither the Collateral Agent nor any Holder shall
have any obligation or liability under any Receivable (or any agreement giving
rise thereto) or any contract of any Grantor by reason of or arising out of this
Agreement or the receipt by the Collateral Agent or any Holder of any payment
relating thereto, nor shall the Collateral Agent or any Holder be obligated in
any manner to perform any of the obligations of any Grantor under or pursuant to
any Receivable (or any agreement giving rise thereto) or any contract of any
Grantor, to make any payment, to make any inquiry as to the nature or the
sufficiency of any payment received by it or as to the sufficiency of any
performance by any party thereunder, to present or file any claim, to take any
action to enforce any performance or to collect the payment of any amounts which
may have been assigned to it or to which it may be entitled at any time or
times.

                                      -15-
<PAGE>

         6.3 Pledged Stock. (a) Unless an Event of Default shall have occurred
and be continuing and the Collateral Agent shall have given notice to the
relevant Grantor of the Collateral Agent's intent to exercise its corresponding
rights pursuant to Section 6.3(b), each Grantor shall be permitted to receive
all cash dividends paid in respect of the Pledged Stock that constitutes
Collateral and all payments made in respect of the Pledged Notes that
constitutes Collateral, in each case paid in the normal course of business of
the relevant Issuer and consistent with past practice, to the extent permitted
in the Indenture, and to exercise all voting and corporate rights with respect
to such Investment Property; provided, however, that following the Discharge of
First Priority Claims, no vote shall be cast or corporate right exercised or
other action taken which would impair the Collateral or which would be
inconsistent with or result in any violation of any provision of the Indenture,
this Agreement or any other Specified Document.

         (b) Following the Discharge of First Priority Claims, if an Event of
Default shall occur and be continuing and the Collateral Agent shall give notice
of its intent to exercise such rights to the relevant Grantor or Grantors, (i)
the Collateral Agent shall have the right to receive any and all cash dividends,
payments or other Proceeds paid in respect of the Investment Property that
constitutes Collateral and make application thereof to the Secured Obligations
in accordance with Section 6.10 of the Indenture, and (ii) any or all of the
Investment Property that constitutes Collateral shall be registered in the name
of the Collateral Agent or its nominee, and the Collateral Agent or its nominee
may thereafter exercise (x) all voting, corporate and other rights pertaining to
such Investment Property at any meeting of shareholders of the relevant Issuer
or Issuers or otherwise and (y) any and all rights of conversion, exchange and
subscription and any other rights, privileges or options pertaining to such
Investment Property as if it were the absolute owner thereof (including, without
limitation, the right to exchange at its discretion any and all of such
Investment Property upon the merger, consolidation, reorganization,
recapitalization or other fundamental change in the corporate structure of any
Issuer, or upon the exercise by any Grantor or the Collateral Agent of any
right, privilege or option pertaining to such Investment Property, and in
connection therewith, the right to deposit and deliver any and all of such
Investment Property with any committee, depository, transfer agent, registrar or
other designated agency upon such terms and conditions as the Collateral Agent
may determine), all without liability except to account for property actually
received by it, but the Collateral Agent shall have no duty to any Grantor to
exercise any such right, privilege or option and shall not be responsible for
any failure to do so or delay in so doing.

         (c) Following the Discharge of First Priority Claims, each Grantor
hereby authorizes and instructs each Issuer of any Investment Property pledged
by such Grantor hereunder to (i) comply with any instruction received by it from
the Collateral Agent in writing that (x) states that an Event of Default has
occurred and is continuing and (y) is otherwise in accordance with the terms of
this Agreement, without any other or further instructions from such Grantor, and
each Grantor agrees that each Issuer shall be fully protected in so complying,
and (ii) unless otherwise expressly permitted hereby, pay any dividends or other
payments with respect to such Investment Property directly to the Collateral
Agent.

         6.4 Proceeds to be Turned Over To Collateral Agent. In addition to the
rights of the Collateral Agent and the Holders specified in Section 6.1 with
respect to payments of Receivables, following the Discharge of First Priority
Claims and subject to the terms of the

                                      -16-
<PAGE>

Intercreditor Agreement, if an Event of Default shall occur and be continuing,
all Proceeds received by any Grantor in respect of Collateral consisting of
cash, checks and other near-cash items shall be held by such Grantor in trust
for the Collateral Agent and the Holders, segregated from other funds of such
Grantor, and shall, forthwith upon receipt by such Grantor, be turned over to
the Collateral Agent in the exact form received by such Grantor (duly indorsed
by such Grantor to the Collateral Agent, if required). Following the Discharge
of First Priority Claims and subject to the terms of the Intercreditor
Agreement, all Proceeds received by the Collateral Agent hereunder shall be held
by the Collateral Agent in a Collateral Account maintained under its sole
dominion and control. All Proceeds while held by the Collateral Agent in a
Collateral Account (or by such Grantor in trust for the Collateral Agent and the
Holders) shall continue to be held as collateral security for all the Secured
Obligations and shall not constitute payment thereof until applied as provided
in Section 6.5.

         6.5 Application of Proceeds. Following the Discharge of First Priority
Claims and if an Event of Default shall have occurred and be continuing, upon
the direction of the Trustee (or, if a declaration of acceleration has been made
and not rescinded pursuant to Section 6.02 of the Indenture, unless the Trustee
directs otherwise) the Collateral Agent shall pay all (or any part of, if
directed by the Trustee) Proceeds in respect of Collateral held in any
Collateral Account in payment of the Secured Obligations to the Trustee for
application pursuant to Section 6.10 of the Indenture.

         6.6 Code and Other Remedies. Subject to the terms of the Intercreditor
Agreement, if an Event of Default shall occur and be continuing, the Collateral
Agent, on behalf of the Holders, may exercise, in addition to all other rights
and remedies granted to them in this Agreement and in any other instrument or
agreement securing, evidencing or relating to the Secured Obligations, all
rights and remedies of a secured party under the New York UCC or any other
applicable law. Without limiting the generality of the foregoing, the Collateral
Agent, without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice required by law referred
to below) to or upon any Grantor or any other Person (all and each of which
demands, defenses, advertisements and notices are hereby waived), may (subject
to the terms of the Intercreditor Agreement) in such circumstances forthwith
collect, receive, appropriate and realize upon the Collateral, or any part
thereof, and/or may forthwith sell, lease, assign, give option or options to
purchase, or otherwise dispose of and deliver the Collateral or any part thereof
(or contract to do any of the foregoing), in one or more parcels at public or
private sale or sales, at any exchange, broker's board or office of the
Collateral Agent or any Holder or elsewhere upon such terms and conditions as it
may deem advisable and at such prices as it may deem best, for cash or on credit
or for future delivery without assumption of any credit risk. Subject to the
terms of the Intercreditor Agreement, the Collateral Agent or any Holder shall
have the right upon any such public sale or sales, and, to the extent permitted
by law, upon any such private sale or sales, to purchase the whole or any part
of the Collateral so sold, free of any right or equity of redemption in any
Grantor, which right or equity is hereby waived and released. Each Grantor
further agrees (subject to the terms of the Intercreditor Agreement), at the
Collateral Agent's request, to assemble the Collateral and make it available to
the Collateral Agent at places which the Collateral Agent shall reasonably
select, whether at such Grantor's premises or elsewhere. The Collateral Agent
shall apply the net proceeds of any action taken by it pursuant to this Section
6.6 in accordance with the terms of the Intercreditor Agreement and, following
the Discharge of First Priority Claims, after deducting all reasonable costs and

                                      -17-
<PAGE>

expenses of every kind incurred in connection therewith or incidental to the
care or safekeeping of any of the Collateral or in any way relating to the
Collateral or the rights of the Collateral Agent and the Holders hereunder,
including, without limitation, reasonable attorneys' fees and disbursements, to
the payment in whole or in part of the Secured Obligations, in accordance with
Section 6.10 of the Indenture, and only after such application and after the
payment by the Collateral Agent of any other amount required by any provision of
law, including, without limitation, Section 9-615(a)(3) of the New York UCC,
need the Collateral Agent account for the surplus, if any, to any Grantor. To
the extent permitted by applicable law, each Grantor waives all claims, damages
and demands it may acquire against the Collateral Agent or any Holder arising
out of the exercise by them of any rights hereunder. If any notice of a proposed
sale or other disposition of Collateral shall be required by law, such notice
shall be deemed reasonable and proper if given at least 10 days before such sale
or other disposition.

         6.7 Registration Rights. (a) Notwithstanding anything to the contrary
in this Section 6.7, the provisions of this Section 6.7 are subject to the terms
of the Intercreditor Agreement.

         (b) If the Collateral Agent shall determine to exercise its right to
sell any or all of the Pledged Stock that constitutes Collateral pursuant to
Section 6.6, and if requested by the Collateral Agent to have such Pledged
Stock, or that portion thereof to be sold, registered under the provisions of
the Securities Act, the relevant Grantor will cause the Issuer thereof to (i)
execute and deliver, and cause the directors and officers of such Issuer to
execute and deliver, all such instruments and documents, and do or cause to be
done all such other acts as may be necessary or advisable, as requested by the
Collateral Agent, to register such Pledged Stock, or that portion thereof to be
sold, under the provisions of the Securities Act, (ii) use its best efforts to
cause the registration statement relating thereto to become effective and to
remain effective for a period of one year from the date of the first public
offering of such Pledged Stock, or that portion thereof to be sold, and (iii)
make all amendments thereto and/or to the related prospectus which are necessary
or advisable, as requested by the Collateral Agent, all in conformity with the
requirements of the Securities Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto. Each Grantor agrees to
cause such Issuer to comply with the provisions of the securities or "Blue Sky"
laws of any and all jurisdictions which the Collateral Agent shall designate and
to make available to its security holders, as soon as practicable, an earnings
statement (which need not be audited) which will satisfy the provisions of
Section 11(a) of the Securities Act.

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

                                      -18-
<PAGE>

securities for public sale under the Securities Act, or under applicable state
securities laws, even if such Issuer would agree to do so.

         (d) Each Grantor agrees to use its best efforts to do or cause to be
done all such other acts as may be necessary to make such sale or sales of all
or any portion of the Pledged Stock that constitutes Collateral pursuant to this
Section 6.7 valid and binding and in compliance with any and all other
applicable requirements of law. Each Grantor further agrees that a breach of any
of the covenants contained in this Section 6.7 will cause irreparable injury to
the Collateral Agent and the Holders, that the Collateral Agent and the Holders
have no adequate remedy at law in respect of such breach and, as a consequence,
that each and every covenant contained in this Section 6.7 shall be specifically
enforceable against such Grantor, and such Grantor hereby waives and agrees not
to assert any defenses against an action for specific performance of such
covenants except for a defense that no Event of Default has occurred under the
Indenture.

         6.8 Deficiency. Each Grantor shall remain liable for any deficiency if
the proceeds of any sale or other disposition of the Collateral are insufficient
to pay its Secured Obligations and the reasonable fees and disbursements of any
attorneys employed by the Collateral Agent or any Holder of the Securities to
collect such deficiency.

                        SECTION 7. THE COLLATERAL AGENT

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

                  (i) following the Discharge of First Priority Claims, in the
         name of such Grantor or its own name, or otherwise, take possession of
         and indorse and collect any checks, drafts, notes, acceptances or other
         instruments for the payment of moneys due under any Receivable or any
         material contract of any Grantor or with respect to any other
         Collateral and file any claim or take any other action or proceeding in
         any court of law or equity or otherwise deemed appropriate by the
         Collateral Agent for the purpose of collecting any and all such moneys
         due under any Receivable or any material contract of any Grantor or
         with respect to any other Collateral whenever payable;

                  (ii) in the case of any Intellectual Property, execute and
         deliver, and have recorded, any and all agreements, instruments,
         documents and papers as the Collateral Agent may request to evidence
         the Collateral Agent's and the Holders' security interest in such
         Intellectual Property and the goodwill (if applicable) and general
         intangibles of such Grantor relating thereto or represented thereby;

                                      -19-
<PAGE>

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

                  (iv) execute, in connection with any sale provided for in
         Section 6.6 or 6.7, any indorsements, assignments or other instruments
         of conveyance or transfer with respect to the Collateral; and

                  (v) following the Discharge of First Priority Claims, (1)
         direct any party liable for any payment under any of the Collateral to
         make payment of any and all moneys due or to become due thereunder
         directly to the Collateral Agent or as the Collateral Agent shall
         direct; (2) ask or demand for, collect, and receive payment of and
         receipt for, any and all moneys, claims and other amounts due or to
         become due at any time in respect of or arising out of any Collateral;
         (3) sign and indorse any invoices, freight or express bills, bills of
         lading, storage or warehouse receipts, drafts against debtors,
         assignments, verifications, notices and other documents in connection
         with any of the Collateral; (4) commence and prosecute any suits,
         actions or proceedings at law or in equity in any court of competent
         jurisdiction to collect the Collateral or any portion thereof and to
         enforce any other right in respect of any Collateral; (5) defend any
         suit, action or proceeding brought against such Grantor with respect to
         any Collateral; (6) settle, compromise or adjust any such suit, action
         or proceeding and, in connection therewith, give such discharges or
         releases as the Collateral Agent may request; (7) assign any Copyright,
         Patent or Trademark (along with the goodwill of the business to which
         any such Copyright, Patent or Trademark pertains), throughout the world
         for such term or terms, on such conditions, and in such manner, as the
         Collateral Agent shall request; and (8) generally, sell, transfer,
         pledge and make any agreement with respect to or otherwise deal with
         any of the Collateral as fully and completely as though the Collateral
         Agent were the absolute owner thereof for all purposes, and do, at the
         Collateral Agent's option and such Grantor's expense, at any time, or
         from time to time, all acts and things which the Collateral Agent
         requests to protect, preserve or realize upon the Collateral and the
         Collateral Agent's and the Holders' security interests therein and to
         effect the intent of this Agreement, all as fully and effectively as
         such Grantor might do.

         Anything in this Section 7.1(a) to the contrary notwithstanding, the
Collateral Agent agrees that it will not exercise any rights under the power of
attorney provided for in this Section 7.1(a) unless an Event of Default shall
have occurred and be continuing.

         (b) If any Grantor fails to perform or comply with any of its
agreements contained herein, the Collateral Agent, at its option, but without
any obligation so to do, may perform or comply, or otherwise cause performance
or compliance, with such agreement.

         (c) The expenses of the Collateral Agent incurred in connection with
actions undertaken as provided in this Section 7.1, from the date of payment by
the Collateral Agent to the date reimbursed by the relevant Grantor, shall be
payable by such Grantor to the Collateral Agent on demand.

                                      -20-
<PAGE>

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

         7.2 Duty of Collateral Agent. (a) The Collateral Agent's sole duty,
other than the obligations under the Intercreditor Agreement, with respect to
the custody, safekeeping and physical preservation of the Collateral in its
possession, under Section 9-207 of the New York UCC or otherwise, shall be to
deal with it in the same manner as the Collateral Agent deals with similar
property for its own account. Beyond such duty, the Collateral Agent shall have
no duty as to any Collateral in its possession or control or any income thereon
or as to preservation of rights against prior parties or any other rights
pertaining thereto and the Collateral Agent shall not be responsible for filing
any financing or continuation statements or recording any documents or
instruments in any public office at any time or times or otherwise perfecting or
maintaining the perfection of any security interest in the Collateral.

         (b) Pursuant to the Collateral Agent's appointment as Collateral Agent
under the Indenture, it shall act as Collateral Agent and shall be authorized to
appoint co-Collateral Agents as necessary in its sole discretion. Neither the
Collateral Agent nor any of its respective officers, directors, employees or
agents shall be liable for failure to demand, collect or realize upon any of the
Collateral or for any delay in doing so or shall be under any obligation to sell
or otherwise dispose of any Collateral upon the request of any other Person or
to take any other action whatsoever with regard to the Collateral or any part
thereof. The powers conferred on the Collateral Agent hereunder are solely to
protect the Collateral Agent's interest in the Collateral and shall not impose
any duty upon the Collateral Agent to exercise any such powers. The Collateral
Agent shall be accountable only for amounts that it actually receives as a
result of the exercise of such powers, and neither the Collateral Agent nor any
of its officers, directors, employees or agents shall be responsible for any act
or failure to act hereunder, except for its own gross negligence or willful
misconduct.

         7.3 Execution of Financing Statements. Pursuant to applicable law, each
Grantor authorizes the Collateral Agent to file or record financing statements
and other filing or recording documents or instruments with respect to the
Collateral without the signature of such Grantor in such form and in such
offices as the Collateral Agent determines appropriate to perfect the security
interests of the Collateral Agent under this Agreement. A photographic or other
reproduction of this Agreement shall be sufficient as a financing statement or
other filing or recording document or instrument for filing or recording in any
jurisdiction.

         7.4 Authority of Collateral Agent. Each Grantor acknowledges that the
rights and responsibilities of the Collateral Agent under this Agreement with
respect to any action taken by the Collateral Agent or the exercise or
non-exercise by the Collateral Agent of any option, voting right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Agreement shall, as among the Collateral Agent, the Trustee and the
Holders, be governed by the Indenture, the Intercreditor Agreement and by such
other agreements with respect thereto as may exist from time to time among them,
but, as between the Collateral Agent and the Grantors, the Collateral Agent
shall be conclusively presumed to be acting as agent for the

                                      -21-
<PAGE>

Holders with full and valid authority so to act or refrain from acting, and no
Grantor shall be under any obligation, or entitlement, to make any inquiry
respecting such authority.

                            SECTION 8. MISCELLANEOUS

         8.1 Amendments in Writing. None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except in
accordance with Article Nine of the Indenture.

         8.2 Notices. All notices, requests and demands to or upon the
Collateral Agent or any Grantor hereunder shall be effected in the manner
provided for in subsection 11.02 of the Indenture; provided that any such
notice, request or demand to or upon the Collateral Agent or any Guarantor shall
be addressed to the Collateral Agent or such Guarantor at its notice address set
forth on Schedule 1 (or such additional or different address as such Person may
designate by written notice to each other such Person).

         8.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the
Collateral Agent nor any Holder shall by any act (except by a written instrument
pursuant to Section 8.1), delay, indulgence, omission or otherwise be deemed to
have waived any right or remedy hereunder or to have acquiesced in any Default
or Event of Default. No failure to exercise, nor any delay in exercising, on the
part of the Collateral Agent or any Holder, any right, power or privilege
hereunder shall operate as a waiver thereof. No single or partial exercise of
any right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. A
waiver by the Collateral Agent or any Holder of any right or remedy hereunder on
any one occasion shall not be construed as a bar to any right or remedy which
the Collateral Agent or such Holder would otherwise have on any future occasion.
The rights and remedies herein provided are cumulative, may be exercised singly
or concurrently and are not exclusive of any other rights or remedies provided
by law.

         8.4 [Intentionally Omitted].

         8.5 Successors and Assigns. This Agreement shall be binding upon the
successors and assigns of each Grantor and shall inure to the benefit of the
Collateral Agent and the Holders and their successors and assigns; provided that
no Grantor may assign, transfer or delegate any of its rights or obligations
under this Agreement without the prior written consent of the Collateral Agent.

         8.6 Set-Off. Each Grantor hereby irrevocably authorizes the Collateral
Agent and each Holder at any time and from time to time while an Event of
Default pursuant to subsection 6.01 of the Indenture shall have occurred and be
continuing, without notice to such Grantor or any other Grantor, any such notice
being expressly waived by each Grantor, to set-off and appropriate and apply any
and all deposits (general or special, time or demand, provisional or final), in
any currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by the Collateral Agent or such Holder to
or for the credit or the account of such Grantor, or any part thereof in such
amounts as the Collateral Agent or such Holder may elect, against and on account
of the obligations and liabilities of such Grantor to the Collateral Agent or
such

                                      -22-
<PAGE>

Holder hereunder and claims of every nature and description of the Collateral
Agent or such Holder against such Grantor, in any currency, whether arising
hereunder, under the Indenture, any other Specified Document or otherwise, as
the Collateral Agent or such Holder may elect, whether or not the Collateral
Agent or any Holder has made any demand for payment and although such
obligations, liabilities and claims may be contingent or unmatured. The
Collateral Agent and each Holder shall notify such Grantor promptly of any such
set-off and the application made by the Collateral Agent or such Holder of the
proceeds thereof, provided that the failure to give such notice shall not affect
the validity of such set-off and application. The rights of the Collateral Agent
and each Holder under this Section 8.6 are in addition to other rights and
remedies (including, without limitation, other rights of set-off) which the
Collateral Agent or such Holder may have.

         8.7 Counterparts. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts (including by
telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.

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

         8.9 Section Headings. The Section headings used in this Agreement are
for convenience of reference only and are not to affect the construction hereof
or be taken into consideration in the interpretation hereof.

         8.10 Integration. This Agreement and the other Specified Documents
represent the agreement of the Grantors, the Collateral Agent and the Holders
with respect to the subject matter hereof and thereof, and there are no
promises, undertakings, representations or warranties by the Collateral Agent or
any Holder relative to subject matter hereof and thereof not expressly set forth
or referred to herein or in the other Specified Documents.

         8.11 Governing Law; Submission To Jurisdiction. THIS AGREEMENT WILL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE
EXTENT THAT THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY. Each of the parties hereto hereby irrevocably and unconditionally:

         (a) submits for itself and its property in any legal action or
proceeding relating to this Agreement, or for recognition and enforcement of any
judgment in respect thereof, to the non-exclusive general jurisdiction of the
Courts of the State of New York, the courts of the United States of America for
the Southern District of New York and appellate courts from any thereof;

         (b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the venue
of any such action or

                                      -23-
<PAGE>

proceeding in any such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;

         (c) agrees that service of process in any such action or proceeding may
be effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such Person at its
address referred to in Section 8.2 or at such other address of which notice
shall have been given pursuant thereto;

         (d) agrees that nothing herein shall affect the right to effect service
of process in any other manner permitted by law or shall limit the right to sue
in any other jurisdiction; and

         (e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to in
this Section any special, exemplary, punitive or consequential damages.

         8.12 Acknowledgments. Each Grantor hereby acknowledges that:

                  (a) it has been advised by counsel in the negotiation,
         execution and delivery of this Agreement and the other Specified
         Documents to which it is a party;

                  (b) neither the Collateral Agent nor any Holder has any
         fiduciary relationship with or duty to any Grantor arising out of or in
         connection with this Agreement or any of the other Specified Documents,
         and the relationship between the Grantors, on the one hand, and the
         Collateral Agent and Holders, on the other hand, in connection herewith
         or therewith is solely that of debtor and creditor; and

                  (c) no joint venture is created hereby or by the other
         Specified Documents or otherwise exists by virtue of the transactions
         contemplated hereby among the Holders or among the Grantors and the
         Holders.

         8.13 Additional Grantors. Each Subsidiary of the Company that is
required to become a party to this Agreement pursuant to subsection 4.18 of the
Indenture shall become a Grantor for all purposes of this Agreement upon
execution and delivery by such Subsidiary of an Assumption Agreement in the form
of Annex 1 hereto.

         8.14 Releases. (a) At such time as the Secured Obligations shall have
been paid in full, the Collateral shall be released from the Liens created
hereby, and this Agreement and all obligations (other than those expressly
stated to survive such termination) of the Collateral Agent and each Grantor
hereunder shall terminate, all without delivery of any instrument or performance
of any act by any party, and all rights to the Collateral shall revert to the
Grantors. At the request and sole expense of any Grantor following any such
termination, the Collateral Agent shall deliver to such Grantor any Collateral
held by the Collateral Agent hereunder, and execute and deliver to such Grantor
such documents as such Grantor shall reasonably request to evidence such
termination.

         (b) If any of the Collateral shall (i) be sold or disposed of by any
Grantor in a transaction permitted by the Indenture or (ii) otherwise become
subject to the release provisions set forth in Section 12.03 of the Indenture or
Section 5.1 of the Intercreditor Agreement, such Collateral

                                      -24-
<PAGE>

shall be released from the Lien created hereby to the extent provided in Section
12.03 of the Indenture or Section 5.1 of the Intercreditor Agreement, as
applicable, and, in connection therewith, the Collateral Agent, at the request
and sole expense of the Company, shall execute and deliver to the Company all
releases or other documents reasonably necessary or desirable for the release of
the Lien created hereby on such Collateral. At the request and sole expense of
the Company, a Grantor shall be released from its obligations hereunder and the
Lien granted by such Grantor pursuant to the terms of this Agreement on the
Collateral shall be released in the event that all the Capital Stock of such
Grantor shall be so sold, disposed of or released; provided that the Company
shall have delivered to the Collateral Agent, at least ten Business Days prior
to the date of the proposed release, a written request for release identifying
the relevant Grantor and the terms of the sale or other disposition in
reasonable detail, including the price thereof and any expenses in connection
therewith, together with a certification by the Company stating that such
transaction is in compliance with the Indenture and the other Specified
Documents.

         8.15 Intercreditor Agreement. (a) Notwithstanding anything herein to
the contrary, the lien and security interest granted to the Collateral Agent
pursuant to this Agreement and the exercise of any right or remedy by the
Collateral Agent hereunder are subject to the provisions of the Intercreditor
Agreement. In the event of any conflict between the terms of the Intercreditor
Agreement and this Agreement, the terms of the Intercreditor Agreement shall
govern.

         (b) The Grantors acknowledge that the Intercreditor Agreement and the
rights and benefits thereof (and specific references thereto herein) inure only
to the benefit of the Credit Agent and the Collateral Agent and their respective
successors and assigns and each of the holders of First Priority Claims and
Second Priority Claims (as such terms are defined in the Intercreditor
Agreement), and that no other Person, including the Grantors, shall have or be
entitled to assert any rights or benefits hereunder arising under the
Intercreditor Agreement or by virtue of the existence of the specific references
thereto herein.

         (c) Until the Discharge of First Priority Claims, in the event the
Credit Agent or the First Priority Lenders enter into any amendment, waiver or
consent in respect of any of the First Priority Collateral Documents for the
purpose of adding to, or deleting from, or waiving or consenting to any
departures from any provisions of, any First Priority Collateral Document or
changing in any manner the rights of the Credit Agent, the First Priority
Lenders, the Company or any other Grantor thereunder, then such amendment,
waiver or consent shall apply automatically to any comparable provision of this
Agreement or any related instrument or document without the consent of the
Collateral Agent or any Holders and without any action by the Collateral Agent
or any Holders, the Company or any other Grantor, provided that such amendment,
waiver or consent of such First Priority Collateral Documents conforms with the
requirements of Section 5.3(b) of the Intercreditor Agreement.

                                      -25-
<PAGE>

         IN WITNESS WHEREOF, each of the undersigned has caused this Collateral
Agreement to be duly executed and delivered as of the date first above written.

                                  TENNECO AUTOMOTIVE INC.

                                  By:
                                      ------------------------------------------
                                      Name:
                                      Title:

                                  TENNECO AUTOMOTIVE OPERATING COMPANY INC.

                                  By:
                                      ------------------------------------------
                                      Name:
                                      Title:

                                  TENNECO INTERNATIONAL HOLDING CORP.

                                  By:
                                      ------------------------------------------
                                      Name:
                                      Title:

                                  TENNECO GLOBAL HOLDINGS INC.

                                  By:
                                      ------------------------------------------
                                      Name:
                                      Title:

<PAGE>

                                  THE PULLMAN COMPANY

                                  By:
                                      ------------------------------------------
                                      Name:
                                      Title:

                                  TMC TEXAS INC.

                                  By:
                                      ------------------------------------------
                                      Name:
                                      Title:

                                  CLEVITE INDUSTRIES INC.

                                  By:
                                      ------------------------------------------
                                      Name:
                                      Title:

                                  Acknowledged and Agreed as of the date hereof:
                                  WACHOVIA BANK, NATIONAL ASSOCIATION, as
                                  Collateral Agent

                                  By:
                                      ------------------------------------------
                                      Name:
                                      Title:

<PAGE>

                                   SCHEDULE 1

                                NOTICE ADDRESSES

The notice address of all Guarantors is:

         [Guarantor Name]
         Attn:  Mark A. McCollum
         Chief Financial Officer
         500 North Field Drive
         Lake Forest, Illinois 60045

with a copy to:

         Tenneco Automotive Operating Company Inc.
         Attn:  Timothy R. Donovan
         General Counsel
         500 North Field Drive
         Lake Forest, Illinois 60045

The notice address of the Collateral Agent is:

         Wachovia Bank, National Association
         Attn: Corporate Trust Department
         5847 San Felipe, Suite 1050
         Houston, Texas 77057

<PAGE>

                                   SCHEDULE 2

                       DESCRIPTION OF INVESTMENT PROPERTY
                              PART I: PLEDGED STOCK

TENNECO AUTOMOTIVE INC.

<Table>
<Caption>
                                                                                                               ISSUED/AUTHORIZED
                             ISSUER                     NO. OF SHARES  CLASS OF STOCK    STOCK CERTIFICATE    TOTAL NO. OF SHARES
                             ------                     -------------  --------------    -----------------    -------------------
<S>       <C>                                           <C>            <C>               <C>                  <C>
   1.     Tenneco Automotive Operating Company Inc.             231        Common                9                  231/250
</Table>

TENNECO AUTOMOTIVE OPERATING COMPANY INC.

<Table>
<Caption>
                                                                                                             ISSUED/AUTHORIZED
                       ISSUER                     NO. OF SHARES     CLASS OF STOCK    STOCK CERTIFICATE     TOTAL NO. OF SHARES
                       ------                     -------------     --------------    -----------------     -------------------
<S> <C>                                           <C>               <C>               <C>                   <C>
 1. McPherson Strut Company Inc. (Delaware)               200           Common                3                   200/200
 2. Precision Modular Assembly Corp. (Delaware)           200           Common                3                   200/200
 3. Tenneco Asheville Inc. (Delaware)                     200           Common                5                   200/200
 4. Tenneco Asia Inc. (Delaware)                          200           Common                5                   200/200
 5. Tenneco Automotive RSA Company (Delaware)             200           Common                3                   200/200
 6. Tenneco Automotive Trading Company                    1000          Common                5                  1000/1000
    (Delaware)
 7. Tenneco Brake, Inc. (Delaware)                        1000          Common                7                  1000/1000
 8. Tenneco Europe Limited (Delaware)                     200           Common                7                   200/200
 9. Tenneco International Holding Corp.                40,809,036       Common               15               40,809,036/50M
    (Delaware)
10. The Pullman Company (Delaware)                        221           Common              NC-5                  221/250
11. TMC Texas Inc. (Delaware)                             200           Common                4                   200/200
12. Walker Electronic Silencing Inc. (Delaware)           200           Common                6                   200/200
13. Walker Europe Inc. (Delaware)                         200           Common                7                   200/200
14. Walker Manufacturing Company (Delaware)               200           Common                7                   200/200
</Table>

<PAGE>

TENNECO INTERNATIONAL HOLDING CORP. (100% OWNED BY TENNECO AUTOMOTIVE OPERATING
COMPANY INC.)

<Table>
<Caption>
                                                                                                               ISSUED/AUTHORIZED
                             ISSUER                     NO. OF SHARES    CLASS OF STOCK   STOCK CERTIFICATE   TOTAL NO. OF SHARES
                             ------                     -------------    --------------   -----------------   -------------------
<S>       <C>                                           <C>              <C>              <C>                 <C>
   1.     Tenneco Global Holdings Inc. (Delaware)             315,000        Common               3             315,000/315,000
</Table>

THE PULLMAN COMPANY

<Table>
<Caption>
                                                                                                               ISSUED/AUTHORIZED
                             ISSUER                     NO. OF SHARES    CLASS OF STOCK   STOCK CERTIFICATE   TOTAL NO. OF SHARES
                             ------                     -------------    --------------   -----------------   -------------------
<S>       <C>                                           <C>              <C>              <C>                 <C>
   1.     Clevite Industries Inc. (Delaware)                   1,000         Common             NC-1              1,000/1,000
   2.     Peabody International Corporation (Delaware)         1,000         Common             NC-1              1,000/1,000
   3.     Pullman Standard Inc. (Delaware)                     1,000         Common             NC-1              1,000/1,000
</Table>

                                  Schedule 2-2
<PAGE>

                                   SCHEDULE 2

                       DESCRIPTION OF INVESTMENT PROPERTY
                             PART II: PLEDGED NOTES

1.       Promissory Note dated January 23, 2001, issued by Gould Electronics
         Inc. in favor of Tenneco Automotive Operating Company Inc. in the
         original principal amount of $3,768,625.00.(1)

2.       Promissory Note dated June 30, 1998, issued by MLB Ltd. in favor of
         Barasset Corp. (a subsidiary of The Pullman Company) in the original
         principal amount of $850,000.00.(2)

----------

(1)      To be delivered to Credit Agent at closing.

(2)      The Company is currently searching for this note. When found or
         replaced the Company will deliver to the Credit Agent or Collateral
         Agent, as applicable.

                                  Schedule 2-3
<PAGE>

                                   SCHEDULE 3

                      FILINGS AND OTHER ACTIONS REQUIRED TO
                           PERFECT SECURITY INTERESTS

                     PART I: UNIFORM COMMERCIAL CODE FILINGS

<Table>
<Caption>
               GRANTOR                               FILING OFFICE
               -------                               -------------
<S>                                                  <C>
Tenneco Automotive Inc.                                 Delaware
Tenneco Automotive Operating Company Inc.               Delaware
Tenneco International Holding Corp.                     Delaware
The Pullman Company                                     Delaware
Tenneco Global Holdings Inc.                            Delaware
Clevite Industries Inc.                                 Delaware
TMC Texas Inc.                                          Delaware
</Table>

<PAGE>

                                   SCHEDULE 3

                       PART II: OTHER ACTIONS REQUIRED TO
                           PERFECT SECURITY INTERESTS

DELIVERY OF PLEDGED STOCK*

1.       Tenneco Automotive Inc.
2.       McPherson Strut Company
3.       Precision Modular Assembly Corp.
4.       Tenneco Ashville Inc.
5.       Tenneco Asia Inc.
6.       Tenneco Automotive RSA Company
7.       Tenneco Automotive Trading Company
8.       Tenneco Brake, Inc.
9.       Tenneco Europe Limited
10.      Tenneco International Holding Corp.
11.      Tenneco Global Holdings Inc.
12.      The Pullman Company
13.      Clevite Industries Inc.
14.      Peabody International Corporation
15.      Pullman Standard Inc.
16.      TMC Texas Inc.
17.      Walker Electronic Silencing Inc.
18.      Walker Europe, Inc.
19.      Walker Manufacturing Company

DELIVERY OF PLEDGED NOTES

1.       Gould Electronics Note listed on Schedule 2, Part II**

FILING(S) WITH THE U.S. PATENT AND TRADEMARK OFFICE

1.       Security Interest in United States Patents, dated as of June __, 2003,
         by Tenneco Automotive Inc., Tenneco Automotive Operating Company Inc.,
         Tenneco International Holding Corp., Tenneco Global Holdings Inc., The
         Pullman Company, TMC Texas Inc. and Clevite Industries Inc., in favor
         of Wachovia Bank, National Association, as Collateral Agent

2.       Security Interest in United States Trademarks, dated as of June __,
         2003, by Tenneco Automotive Inc., Tenneco Automotive Operating Company
         Inc., Tenneco International Holding Corp., Tenneco Global Holdings
         Inc., The Pullman Company, TMC Texas Inc.

----------

* Previously delivered to Credit Agent.

** To be delivered to Credit Agent.

                                  Schedule 3-2
<PAGE>

         and Clevite Industries Inc., in favor of Wachovia Bank, National
         Association, as Collateral Agent

FILINGS AND OTHER ACTIONS

The filings and other actions listed above are sufficient to perfect a security
interest in Collateral to the extent security interests in such Collateral can
be perfected by the filing of Financing Statements under Article 9 of the
applicable UCC (the "Article 9 Collateral"). Additional actions may be required
to perfect a security interest in Collateral other than the Article 9
Collateral.

                                  Schedule 3-3
<PAGE>

                                   SCHEDULE 4

                    LOCATION OF JURISDICTION OF ORGANIZATION
                           AND CHIEF EXECUTIVE OFFICE

<Table>
<Caption>
                                                                                              LOCATION OF CHIEF EXECUTIVE OFFICE
                    GRANTOR                  JURISDICTION OF ORGANIZATION                         OR SOLE PLACE OF BUSINESS
                    -------                  ----------------------------                     -----------------------------------
<S>                                          <C>                                    <C>
1.  Tenneco Automotive Inc.                            Delaware                     500 North Field Drive, Lake Forest, IL  60045
2.  Tenneco Automotive Operating Company               Delaware                     500 North Field Drive, Lake Forest, IL  60045
    Inc.
3.  Tenneco International Holding Corp.                Delaware                     500 North Field Drive, Lake Forest, IL  60045
4.  Tenneco Global Holdings Inc.                       Delaware                     500 North Field Drive, Lake Forest, IL  60045
5.  The Pullman Company                                Delaware                     500 North Field Drive, Lake Forest, IL  60045
6.  TMC Texas Inc.                                     Delaware                     500 North Field Drive, Lake Forest, IL  60045
7.  Clevite Industries Inc.                            Delaware                     500 North Field Drive, Lake Forest, IL  60045
</Table>

<PAGE>

                                   SCHEDULE 5

                       LOCATION OF INVENTORY AND EQUIPMENT

<Table>
<Caption>
                                  GRANTOR                                                  LOCATION
                                  -------                                                  --------
<S>            <C>                                                                   <C>
1.             Tenneco Automotive Operating Company Inc.                             Cornhusker Warehouse
                                                                                     2702 Rector Road
                                                                                     Paragould, AR 72450

2.             Tenneco Automotive Operating Company Inc.                             1801 High 49 B North
                                                                                     Paragould, AR 72450

3.             Tenneco Automotive Operating Company Inc.                             2000 S. Bolton Road
                                                                                     Paragould, AR 72450

4.             Tenneco Automotive Operating Company Inc.                             6925 Atlantic Avenue
                                                                                     Long Beach, CA 90805

5.             Tenneco Automotive Operating Company Inc.                             200 McIntyre Drive
                                                                                     Hartwell, GA 30643

6.             Tenneco Automotive Operating Company Inc.                             500 North Field Drive
                                                                                     Lake Forest, IL 60045

7.             Tenneco Automotive Operating Company Inc.                             605 Heathrow Drive
                                                                                     Lincolnshire, IL 60069

8.             The Pullman Company                                                   503 Weatherhead Street
               Clevite Industries Inc.                                               Angola, IN 46703

9.             Tenneco Automotive Operating Company Inc.                             4825 Hoffman Street
                                                                                     Elkhart, IN 46516

10.            Tenneco Automotive Operating Company Inc.                             1490 Gerber Street
                                                                                     Ligonier, IN 46767

11.            Tenneco Automotive Operating Company Inc.                             Behnke Warehouse
                                                                                     35 Edison Street
                                                                                     Battle Creek, MI 49014

12.            Tenneco Automotive Operating Company Inc.                             3901 Willis Road (P.O. Box 157)
                                                                                     Grass Lake, MI 49240

13.            Tenneco Automotive Operating Company Inc.                             Hillsdale Products
                                                                                     20 Superior Street
                                                                                     Hillsdale, MI 49242

14.            Tenneco Automotive Operating Company Inc.                             2701 North Detman Road
                                                                                     Jackson, MI 49201

15.            Tenneco Automotive Operating Company Inc.                             929 Anderson Road
                                                                                     Litchfield, MI 49252
</Table>

                                  Schedule 5-1
<PAGE>

<Table>
<Caption>
                                  GRANTOR                                                  LOCATION
                                  -------                                                  --------
<S>            <C>                                                                   <C>
16.            Tenneco Automotive Operating Company Inc.                             904 Industrial Road
                                                                                     Marshall, MI 49068

17.            Tenneco Automotive Operating Company Inc.                             1 International Drive
                                                                                     Monroe, MI 48161

18.            Tenneco Automotive Operating Company Inc.                             13910 Lake Drive
                                                                                     (Bolles Harbor)
                                                                                     Monroe, MI

19.            Tenneco Automotive Operating Company Inc.                             6451 15 Mile Road
                                                                                     Sterling Heights, MI 48312

20.            Tenneco Automotive Operating Company Inc.                             1641 Manufacturer's Drive
                                                                                     Fenton, MO 63026 (St. Louis)

21.            Tenneco Automotive Operating Company Inc.                             1846 North Topping Avenue
                                                                                     Kansas City, MO 64120

22.            Tenneco Automotive Operating Company Inc.                             121 Meridian Drive
                                                                                     Cozad, NE 69130

23.            Tenneco Automotive Operating Company Inc.                             Central Logistic Services
                                                                                     1850 Centennial Avenue
                                                                                     Hastings, NE 68901

24.            Tenneco Automotive Operating Company Inc.                             Distribution Inc.
                                                                                     6363 North 70th Street
                                                                                     Lincoln, NE

25.            Tenneco Automotive Operating Company Inc.                             1475 280th Road
                                                                                     Seward, NE 68434

26.            The Pullman Company                                                   33 Lockwood Road
               Clevite Industries Inc.                                               Milan, OH 44846

27.            The Pullman Company                                                   Route 424 (11800 State Route
               Clevite Industries Inc.                                               424)
                                                                                     Napoleon, OH 43545

28.            Tenneco Automotive Operating Company Inc.                             206 Republic Street
                                                                                     Norwalk, OH 44857

29.            Tenneco Automotive Operating Company Inc.                             Johnstone Machinery Movers
                                                                                     13008 Eckel Junction Road
                                                                                     Perrysburg, OH 43551
</Table>

                                  Schedule 5-2
<PAGE>

<Table>
<Caption>
                                  GRANTOR                                                  LOCATION
                                  -------                                                  --------
<S>            <C>                                                                   <C>
30.            Tenneco Automotive Operating Company Inc.                             645 East Broad Street
                                                                                     P.O. Box 119
                                                                                     Smithville, TN 37166

31.            Tenneco Automotive Operating Company Inc.                             Goggin Warehouse - Smithville
                                                                                     247 Hobson
                                                                                     Smithville, TN 37166

32.            Tenneco Automotive Operating Company Inc.                             Turntable, Inc.
                                                                                     101 Moore Street
                                                                                     Sparta, TN 38583

33.            Tenneco Automotive Operating Company Inc.                             3160 Abbott Lane
                                                                                     Harrisonburg, VA 22801

34.            Tenneco Automotive Operating Company Inc.                             4500 Early Road
                                                                                     Harrisonburg, VA 22801

35.            Tenneco Automotive Operating Company Inc.                             Old Dunham Bush Building
                                                                                     101 Burgess Road
                                                                                     Harrisonburg, VA 22801

36.            Tenneco Automotive Operating Company Inc.                             Shenandoah Engineering
                                                                                     1401 Technology Drive
                                                                                     Harrisonburg, VA 22802

37.            Tenneco Automotive Operating Company Inc.                             Livia Properties
                                                                                     600 Hays Avenue
                                                                                     Staunton, VA

38.            Tenneco Automotive Operating Company Inc.                             Factory Warehouse Building
                                                                                     50 Lodge Lane
                                                                                     Verona, VA 24482

39.            Tenneco Automotive Operating Company Inc.                             1569 D Diamond Springs Road
                                                                                     Virginia Beach, VA 23455-3007

40.            Tenneco Automotive Operating Company Inc.                             10840 West Allan Road
                                                                                     Hayward, WI 54843
</Table>

                                  Schedule 5-3
<PAGE>

                                   SCHEDULE 6

                              INTELLECTUAL PROPERTY

COPYRIGHTS

REGISTERED COPYRIGHTS

         None

UNREGISTERED COPYRIGHTS

         The Grantors may have unregistered copyrights in various types of
material prepared within the conduct of their business. These types of materials
can include all written material, including but not limited to any catalogs,
manuals, packaging, labels, and marketing materials for all products
manufactured and sold by a Grantor, as well as pictorial, graphical and other
audio-visual works, computer programs, video recordings, compilations of data,
multimedia and derivative works. However, no registrations have been sought for
these types of copyrightable materials, and it is not the policy of the Grantors
to pursue registered copyrights for these materials.

COPYRIGHT LICENSES

         COPYRIGHT LICENSES GRANTED BY A GRANTOR

                  None

         COPYRIGHT LICENSES GRANTED TO A GRANTOR

                  The Grantors have entered into various operational copyright
         licenses, such as software shrink wrap licenses, commensurate with an
         organization of their size.

PATENTS

UNITED STATES PATENTS AND PENDING PATENT APPLICATIONS

         See attached listing. The property listed on the attached schedule is
held, according to the records of the United States Patent and Trademark Office,
by the relevant Grantor either in its own name or may be registered under a
prior name of such Grantor. The Company hereby warrants, represents and agrees
that it will file appropriate documentation to update the records of the United
States Patent and Trademark Office within two weeks following the date of this
Agreement.

FOREIGN PATENTS AND PENDING PATENT APPLICATIONS

         Any and all foreign patents and foreign patent applications, including
any extensions thereof, which may be existing and owned by a Grantor either in
its own name or registered

<PAGE>

under a prior name of such Grantor. Following the Discharge of First Priority
Claims, at the request of the Collateral Agent, the Company will cause to be
filed appropriate documentation to update the records of the foreign equivalent
of the U.S. Patent and Trademark Office in the relevant jurisdiction to reflect
ownership in the name of such Grantor.

PATENT LICENSES

         PATENT LICENSES GRANTED BY ANY GRANTOR

         1.       Technology License Agreement between Amortiguadores, S.A. and
                  Tenneco Automotive Operating Company Inc. dated July 15, 1993
                  (renewed spring 2002) (TAOC technology to Venezuelan licensee)

         2.       Patent and Trademark License Agreement between Tenneco
                  Automotive Inc. and Monroe Amortisor Imalat Ve Ticaret A.S.
                  dated February 4, 2001 (TAI technology and trademarks)

         3.       Grantors have entered into agreements with Original Equipment
                  Manufacturers (OEM Agreements) which may include a paid up,
                  non-exclusive license to certain of Grantors' technology

         PATENT LICENSES GRANTED TO ANY GRANTOR

         1.       Comprehensive Technical License Agreement by and between
                  Tokico Ltd. and Tenneco Automotive Inc. dated January 17, 2002
                  (Tokico technology)

         2.       Memorandum of Comprehensive Technical License Agreement for
                  Toyota "558N" (South Africa) Project dated January 17, 2002
                  (Tokico technology for a specified project in accordance with
                  the Comprehensive Technical License Agreement)

         3.       Memorandum of Comprehensive Technical License Agreement for
                  Toyota "380N" Camry (Australia) Project dated October 3, 2002
                  (Tokico technology for a specified project in accordance with
                  the Comprehensive Technical License Agreement)

         4.       World-wide license agreement from Hyrad Corp. for patents and
                  know-how relating to adjustable shock absorber technology

TRADEMARKS

UNITED STATES REGISTERED TRADEMARKS AND PENDING APPLICATIONS

         See attached listing. The property listed on the attached schedule is
held, according to the records of the United States Patent and Trademark Office
by the relevant Grantor either in its own name or may be registered under a
prior name of such Grantor. The Company hereby warrants, represents and agrees
that it will file appropriate documentation to update the records

                                  Schedule 6-2
<PAGE>

of the United States Patent and Trademark Office within two weeks following the
date of this Agreement.

FOREIGN REGISTERED TRADEMARKS AND PENDING APPLICATIONS

         Any and all foreign trademark registrations and foreign trademark
applications, including any renewals thereof, which may be existing and owned by
a Grantor either in its own name or registered under a prior name of such
Grantor. Following the Discharge of First Priority Claims, at the request of the
Collateral Agent, the Company will cause to be filed appropriate documentation
to update the records of the foreign equivalent of the U.S. Patent and Trademark
Office in the relevant jurisdiction to reflect ownership in the name of such
Grantor.

COMMON LAW TRADEMARKS

         Any and all trademarks to the extent existing at Common Law which may
be used by a Grantor to indicate the source of their products or services.

TRADEMARK LICENSES

         TRADEMARK LICENSES GRANTED BY ANY GRANTOR

         1.       2003 Championship Off Road Racing (CORR) Associate #2
                  Sponsorship Contract dated February 2, 2003 (TAOC trademarks)

         2.       Trademark License Agreement between Cycle Source Group LLC and
                  Tenneco Automotive Operating Company Inc. undated (TAOC
                  trademarks)

         3.       Patent and Trademark License Agreement between Tenneco
                  Automotive Inc. and Monroe Amortisor Imalat Ve Ticaret A.S.
                  dated February 4, 2001 (TAI technology and trademarks)

         TRADEMARK LICENSES GRANTED TO ANY GRANTOR

         1.       Agreement, dated April 11, 1988, between The Pullman Company
                  and JPI Transportation Products Inc. (regarding the "Clevite"
                  mark)

GENERAL LICENSES

The Grantors have entered into numerous and various types of intellectual
property licenses with wholly-owned divisions, wholly owned subsidiaries or
joint venture companies within the Grantors' organization. These agreements may
allow the companies within Grantors' organization to use various of Grantors'
owned intellectual property in the conduct of their business.

TRADE SECRET/PROPRIETARY INFORMATION

The Grantors may have trade secret and other rights in know-how and confidential
or proprietary information including but not limited to, technologies in
development, computer programs and

                                  Schedule 6-3
<PAGE>

other computer software (including software systems and applications), websites,
domains, domain names, user interfaces, topographies, source code, object code,
algorithms, display screens, layouts, development tools, instructions,
templates, evaluation software and hardware, formulae, manufacturing,
engineering and other drawings and manuals, technology, processes, designs, lab
journals, notebooks, schematics, data plans, blue prints, research and
development reports, technical information and engineering data design and
engineering specifications, customer lists and customer marketing information
and similar materials all evidencing expertise in or information used in the
Grantors' business and the manufacturing, marketing and sale of Grantors'
products.

                                  Schedule 6-4
<PAGE>

                                   SCHEDULE 7

                             COMMERCIAL TORT CLAIMS

                                      None.

<PAGE>

                                                                      Annex 1 to
                                                            Collateral Agreement

         ASSUMPTION AGREEMENT, dated as of ____________ __, ____, made by
______________________________, a ______________ corporation (the "Additional
Grantor"), in favor of WACHOVIA BANK, NATIONAL ASSOCIATION, as collateral agent
(in such capacity, the "Collateral Agent") for the Holders (as defined in the
Indenture described below). All capitalized terms not defined herein shall have
the meaning ascribed to them in such Indenture.

                                   WITNESSETH:

         WHEREAS, pursuant to that certain Indenture, dated as of the date
hereof (as amended, supplemented or otherwise modified from time to time, the
"Indenture"), among Tenneco Automotive Inc., a Delaware corporation (the
"Company"), as Issuer (such term, and all other capitalized terms used herein,
as defined pursuant to Section 1.1), and Wachovia Bank, National Association, a
New York banking corporation, as Trustee, the Company has duly authorized the
issue of 10.25% Senior Secured Notes due 2013, Series A, and 10.25% Senior
Secured Notes due 2013, Series B (as further defined in the Indenture, the
"Securities");

         WHEREAS, in connection with the issuance of the Securities, the Company
and certain of its Subsidiaries (other than the Additional Grantor) have entered
into the Collateral Agreement, dated as of June 19, 2003 (as amended,
supplemented or otherwise modified from time to time, the "Collateral
Agreement") in favor of the Collateral Agent for its benefit and the ratable
benefit of the Trustee and the holders of the Securities;

         WHEREAS, the Indenture requires the Additional Grantor to become a
party to the Collateral Agreement; and

         WHEREAS, the Additional Grantor has agreed to execute and deliver this
Assumption Agreement in order to become a party to the Collateral Agreement;

         NOW, THEREFORE, IT IS AGREED:

                  1. Collateral Agreement. By executing and delivering this
         Assumption Agreement, the Additional Grantor, as provided in Section
         8.13 of the Collateral Agreement, hereby becomes a party to the
         Collateral Agreement as a Grantor thereunder with the same force and
         effect as if originally named therein as a Grantor and, without
         limiting the generality of the foregoing, hereby expressly assumes all
         obligations and liabilities of a Grantor thereunder. The information
         set forth in Annex 1-A hereto is hereby added to the information set
         forth in the Schedules to the Collateral Agreement. The Additional
         Grantor hereby represents and warrants that each of the representations
         and warranties contained in Section 4 of the Collateral Agreement is
         true and correct on and as the date hereof (after giving effect to this
         Assumption Agreement) as if made on and as of such date.

<PAGE>

                  2. Governing Law. THIS ASSUMPTION AGREEMENT WILL BE GOVERNED
         BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
         BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW
         TO THE EXTENT THAT THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION
         WOULD BE REQUIRED THEREBY.

         IN WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed and delivered as of the date first above written.

                                  [ADDITIONAL GRANTOR]
                                  By:
                                      ------------------------------------------
                                      Name:
                                      Title:

<PAGE>

                                                                    Annex 1-A to
                                                            Assumption Agreement

Supplements to Schedule 1

Supplements to Schedule 2

Supplements to Schedule 3

Supplements to Schedule 4

Supplements to Schedule 5

Supplements to Schedule 6

Supplements to Schedule 7<PAGE>

                             INTERCREDITOR AGREEMENT

                  INTERCREDITOR AGREEMENT, dated as of June 19, 2003, among
JPMORGAN CHASE BANK, as Credit Agent, WACHOVIA BANK, NATIONAL ASSOCIATION, as
Trustee and as Collateral Agent, and TENNECO AUTOMOTIVE, INC.

                               W I T N E S S E T H

                  WHEREAS, the Company (such term and each other capitalized
term used herein having the meanings set forth in Section 1 below), certain
lenders (including lenders acting as syndication agent and co-documentation
agents), and JPMorgan Chase Bank, as administrative agent and collateral agent,
are parties to the Credit Agreement dated as of September 30, 1999, as amended
to the date hereof (as further amended, supplemented or otherwise modified from
time to time in a manner consistent with the definition of "Credit Agreement"
below, the "Existing Credit Agreement");

                  WHEREAS, the Obligations of the Company under the Credit
Agreement are secured (together with certain other obligations) by various
assets of the Company and certain Subsidiaries thereof;

                  WHEREAS, the Company, certain Subsidiaries of the Company and
the Trustee have entered into the Indenture dated as of June 19, 2003 (as
amended, supplemented or otherwise modified from time to time, the "Indenture"),
pursuant to which the Company intends to issue the Notes;

                  WHEREAS, the Company and certain lenders under the Existing
Credit Agreement have entered into the Fourth Amendment dated as of May 29, 2003
(the "Fourth Amendment"), to the Existing Credit Agreement that, among other
things, permits, subject to certain terms and conditions, (a) the issuance of
the Notes by the Company and (b) a second priority Lien on the Common Collateral
to secure the Second Priority Claims; and

                  WHEREAS, it is a condition precedent to the effectiveness of
the Fourth Amendment that the parties hereto enter into this Agreement;

                  NOW, THEREFORE, in consideration of the foregoing, the mutual
covenants and obligations herein set forth and for other good and valuable
consideration, the sufficiency and receipt of which are hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as follows:

         SECTION 1. (a) Definitions. As used in this Agreement, the following
terms have the meanings specified below:

                  "Agreement" means this Agreement, as amended, renewed,
         extended, supplemented or otherwise modified from time to time in
         accordance with the terms hereof.

<PAGE>

                                                                               2

                   "Bankruptcy Law" means Title 11 of the United States Code and
         any similar Federal, state or foreign law for the relief of debtors.

                  "Business Day" means any day other than a Saturday, a Sunday
         or a day that is a legal holiday under the laws of the State of New
         York or on which banking institutions in the State of New York are
         required or authorized by law or other governmental action to close.

                  "Cash Management Obligations " means, with respect to any
         Person, all obligations of such Person in respect of overdrafts and
         related liabilities owed to any other Person that arise from treasury,
         depositary or cash management services, including in connection with
         any automated clearing house transfers of funds, or any similar
         transactions.

                  "Common Collateral" means all of the assets of any Grantor,
         whether real, personal or mixed, constituting both First Priority
         Collateral and Second Priority Collateral.

                  "Company" means Tenneco Automotive Inc.

                  "Comparable Second Priority Collateral Document" means, in
         relation to any Common Collateral subject to any Lien created under any
         First Priority Collateral Document, that Second Priority Collateral
         Document which creates a Lien on the same Common Collateral, granted by
         the same Grantor.

                  "Credit Agent" means (i) JPMorgan Chase Bank in its capacity
         as collateral agent under the Existing Credit Agreement and the Loan
         Documents (as defined therein) and also includes its successors
         thereunder as collateral agent for the First Priority Lenders (or if
         there is more than one agent, a majority of them) under the First
         Priority Documents exercising substantially the same rights and powers,
         or if there is no acting Credit Agent under the Existing Credit
         Agreement, the Required Lenders or, if designated by the Credit Agent
         under the Existing Credit Agreement, the lead agent under any other
         First-Lien Credit Facility; and (ii) if the Existing Credit Agreement
         is no longer the Senior Credit Agreement, the financial institution
         then acting as lead agent or collateral agent (in its capacity as such)
         under the Senior Credit Agreement and the related loan documents and
         also includes its successors thereunder as lead agent or collateral
         agent for the First Priority Lenders thereunder (or if there is more
         than one agent, a majority of them) under such First Priority Documents
         exercising substantially the same rights and powers, or if there is no
         acting lead agent or collateral agent under the Senior Credit
         Agreement, First Priority Lenders thereunder holding more than 50% of
         the aggregate outstanding term Indebtedness and revolving credit
         commitments thereunder.

                  "Credit Agreement" means the Existing Credit Agreement,
         together with any documents evidencing or governing any Obligations
         relating thereto (including, without limitation, any guarantee
         agreements and security documents), in each case as such agreements may
         be amended (including any amendment and restatement thereof),
         supplemented or otherwise modified from time to time, including any
         agreement

<PAGE>

                                                                               3

         extending the maturity of, refinancing, replacing or otherwise
         restructuring (including increasing the amount of available borrowings
         thereunder (provided that such increase in borrowings is permitted by
         Section 4.03 of the Indenture) or adding Subsidiaries as additional
         borrowers or guarantors thereunder) all or any portion of the
         Indebtedness under such agreement or any successor or replacement
         agreement and whether by the same or any other agent, lender or group
         of lenders. Notwithstanding the foregoing, the Notes and the Indenture
         shall not constitute a Credit Agreement.

                  "Credit Facilities" means one or more debt facilities
         (including the Credit Agreement) or commercial paper facilities
         providing for revolving credit loans, term loans, receivables financing
         (including through the sale of receivables to lenders or to special
         purpose entities formed to borrow from lenders against such
         receivables) or letters of credit, or any debt securities or other form
         of debt financing (including convertible or exchangeable debt
         instruments), in each case, as amended, supplemented, modified,
         extended, renewed, restated or refunded in whole or in part from time
         to time.

                  "Designated Second Priority Agent" means at any time the
         Trustee or such other Second Priority Agent as shall be designated by
         all Second Priority Agents to act as Designated Second Priority Agent,
         as such other Second Priority Agent shall be identified in a
         certificate executed by all Second Priority Agents and delivered to the
         Administrative Agent.

                   "Discharge of First Priority Claims" means, except to the
         extent otherwise provided in Section 5.6, payment in full in cash of
         (a) the principal of and interest and premium, if any, on all
         Indebtedness outstanding under the First-Lien Credit Facilities or,
         with respect to letters of credit outstanding thereunder, delivery of
         cash collateral or backstop letters of credit in respect thereof in
         compliance with such First-Lien Credit Facilities, as applicable, in
         each case after or concurrently with termination of all commitments to
         extend credit thereunder and (b) any other First Priority Claims that
         are due and payable or otherwise accrued and owing at or prior to the
         time such principal and interest are paid.

                  "Existing Credit Agreement" has the meaning set forth in the
         recitals hereto.

                  "First-Lien Credit Facilities" means (a) the Credit Facilities
         provided pursuant to the Credit Agreement and (b) any other Credit
         Facility, that, in the case of both clauses (a) and (b), is secured by
         a Lien permitted by clause (B) of Section 4.15 of the Indenture.

                  "First Priority Cash Management Obligations" means any Cash
         Management Obligations secured by any Common Collateral under the same
         First Priority Collateral Documents that secure Obligations under the
         Senior Credit Agreement.

                  "First Priority Claims" means (a) all Obligations under the
         Credit Agreement, (b) all Obligations under one or more First-Lien
         Credit Facilities (other than the Credit Facilities provided pursuant
         to the Credit Agreement), the Indebtedness under each of which is
         designated by the Company as "First Priority Claims" for purposes of
         the Indenture, provided that the First Priority Lenders under each
         First-Lien Credit Facility

<PAGE>

                                                                               4

         then in effect have consented to such designation pursuant to the
         provisions of the First Priority Documents then in effect, (c) all
         other Obligations of the Company or any other Grantor under the First
         Priority Documents, including all First Priority Hedging Obligations
         and First Priority Cash Management Obligations and (d) all Future Other
         First-Lien Obligations. Except as provided in the last sentence of this
         definition, any Obligations described in the preceding sentence shall
         constitute First Priority Claims only to the extent such Obligations
         are permitted pursuant to the Indenture. First Priority Claims shall
         include all interest accrued or accruing (or which would, absent the
         commencement of an Insolvency or Liquidation Proceeding, accrue) after
         the commencement of an Insolvency or Liquidation Proceeding in
         accordance with and at the rate specified in the relevant First
         Priority Document whether or not the claim for such interest is allowed
         as a claim in such Insolvency or Liquidation Proceeding. To the extent
         any payment with respect to the First Priority Claims (whether by or on
         behalf of any Grantor, as proceeds of security, enforcement of any
         right of set-off or otherwise) is declared to be fraudulent or
         preferential in any respect, set aside or required to be paid to a
         debtor in possession, trustee, receiver or similar Person, then the
         obligation or part thereof originally intended to be satisfied shall be
         deemed to be reinstated and outstanding as if such payment had not
         occurred. Notwithstanding the foregoing the Notes and related
         Obligations will not constitute First Priority Claims and Collateral
         therefor will not constitute First Priority Collateral even if any
         proceeds of the Notes are used to repay Obligations under the Credit
         Agreement. Notwithstanding anything to the contrary contained in this
         definition, any Obligation under a First Priority Document (including
         any Cash Management Obligations or Hedging Obligations) shall
         constitute a "First Priority Claim" if the Credit Agent or the relevant
         First Priority Lender or First Priority Lenders under such First
         Priority Document shall have received a written representation from the
         Company in or in connection with such First Priority Document that such
         Obligation constitutes a "First Priority Claim" under and as defined in
         the Indenture (whether or not such Obligation is at any time determined
         not to have been permitted to be incurred under the Indenture).

                  "First Priority Collateral" means all of the assets of any
         Grantor, whether real, personal or mixed, with respect to which a Lien
         is granted or held as security for any First Priority Claim.

                  "First Priority Collateral Documents" means any agreement,
         document or instrument pursuant to which a Lien is granted securing any
         First Priority Claims or under which rights or remedies with respect to
         such Liens are governed.

                  "First Priority Documents" means the Credit Agreement, the
         First Priority Collateral Documents, and each of the other agreements,
         documents and instruments (including each agreement, document or
         instrument providing for or evidencing a First Priority Hedging
         Obligation or First Priority Cash Management Obligation) providing for
         or evidencing any Obligation under the Credit Agreement or any other
         First-Lien Credit Facility or any Future Other First-Lien Obligations,
         and any other related document or instrument executed or delivered
         pursuant to any First Priority Document at any time or otherwise
         evidencing any First Priority Claims.

<PAGE>

                                                                               5

                  "First Priority Hedging Obligations" means any Hedging
         Obligations secured by any Common Collateral under the same First
         Priority Collateral Documents that secure Obligations under the Senior
         Credit Agreement.

                  "First Priority Lenders" means the Persons holding First
         Priority Claims, including the Credit Agent.

                  "First Priority Liens"means all Liens that secure First
         Priority Claims

                  "Future Other First-Lien Obligations" means all Obligations of
         the Company or any other Grantor in respect of Cash Management
         Obligations or Hedging Obligations that are designated by the Company
         as "First Priority Claims" for purposes of the Indenture (other than
         any First Priority Cash Management Obligations and First Priority
         Hedging Obligations); provided that the required lenders (however
         denominated) under any Senior Credit Agreement then in effect have
         consented to such designation.

                  "Grantors" means each of the Company and the Subsidiaries that
         has executed and delivered a First Priority Collateral Document or a
         Second Priority Collateral Document.

                  "Hedging Obligations" means, with respect to any Person, the
         obligations of such Person in respect of (a) interest rate or currency
         swap agreements, interest rate or currency cap agreements, interest
         rate or currency collar agreements, or (b) other agreements or
         arrangements designed to protect such Person against fluctuations in
         interest rates and/or currency exchange rates.

                   "Indebtedness" means and includes all Obligations that
         constitute "Indebtedness" within the meaning of the Indenture or the
         Senior Credit Agreement.

                  "Indenture" has the meaning set forth in the recitals hereto.

                  "Insolvency or Liquidation Proceeding" means (a) any voluntary
         or involuntary case or proceeding under any Bankruptcy Law with respect
         to any Grantor, (b) any other voluntary or involuntary insolvency,
         reorganization or bankruptcy case or proceeding, or any receivership,
         liquidation, reorganization or other similar case or proceeding with
         respect to any Grantor or with respect to any of their respective
         assets, (c) any liquidation, dissolution, reorganization or winding up
         of any Grantor whether voluntary or involuntary and whether or not
         involving insolvency or bankruptcy or (d) any assignment for the
         benefit of creditors or any other marshalling of assets and liabilities
         of any Grantor.

                  "Lien" means, with respect to any asset, (a) any mortgage,
         deed of trust, lien, pledge, hypothecation, encumbrance, charge or
         security interest in, on or of such asset, (b) the interest of a vendor
         or a lessor under any conditional sale agreement, capital lease or
         title retention agreement (or any financing lease having substantially
         the same economic effect as any of the foregoing) relating to such
         asset and (c) in the case of securities, any purchase option, call or
         similar right of a third party with respect to such securities.

<PAGE>

                                                                               6

                  "Noteholders" means the Persons holding Notes from time to
         time.

                  "Notes" means (a) the 10 1/4% Senior Secured Notes due 2013 to
         be issued by the Company, (b) the exchange notes issued in exchange
         therefor as contemplated by the Registration Rights Agreement dated as
         of June 19, 2003, among the Company and the Initial Purchasers (as
         defined therein) and (c) any additional notes issued under the
         Indenture by the Company, to the extent permitted by the Indenture and
         the Senior Credit Agreement.

                  "Obligations" means any and all obligations with respect to
         the payment of (a) any principal of or interest (including interest
         accruing on or after the commencement of any Insolvency or Liquidation
         Proceeding, whether or not a claim for post-filing interest is allowed
         in such proceeding) or premium on any Indebtedness, including any
         reimbursement obligation in respect of any letter of credit, (b) any
         fees, indemnification obligations, damages, expense reimbursement
         obligations or other liabilities payable under the documentation
         governing any Indebtedness, (c) any obligation to post cash collateral
         in respect of letters of credit and any other obligations or (d) any
         Cash Management Obligations or Hedging Obligations.

                  "Other Second-Lien Obligations" has the meaning set forth in
         the Indenture; provided that (a) no Obligations with respect to any
         Indebtedness shall be an "Other Second-Lien Obligation" unless such
         Obligation is permitted by the Senior Credit Agreement and is secured
         by a Lien permitted by the Senior Credit Agreement and (b) such
         Obligations (except for the Notes and related Obligations) are
         designated by the Company as "Other Second-Lien Obligations" for
         purposes of the Indenture.

                  "Person" means any natural person, corporation, limited
         liability company, trust, joint venture, association, company,
         partnership, entity or other party, including any government and any
         political subdivision, agency or instrumentality thereof.

                  "Pledged Collateral" means (a) the "Pledged Securities" under,
         and as defined in, the Second Priority Security Agreement, and (b) any
         other Common Collateral in the possession of the Credit Agent (or its
         agents or bailees), to the extent that possession thereof is necessary
         to perfect a Lien thereon under the Uniform Commercial Code.

                  "Recovery" has the meaning set forth in Section 6.5 hereof.

                  "Required Lenders" means, with respect to any amendment or
         modification of the Senior Credit Agreement, or any termination or
         waiver of any provision of the Senior Credit Agreement, or any consent
         or departure by the Company or any of the Subsidiaries therefrom, those
         First Priority Lenders the approval of which is required to approve
         such amendment or modification, termination or waiver or consent or
         departure.

                  "Second Priority Agent" means each of the Trustee and each
         other Person which acts as trustee, lead agent, administrative agent or
         collateral agent for any Second Priority Lenders and, if any Second
         Priority Claims do not have a trustee, lead agent, administrative agent
         or collateral agent, the representative appointed by the holders of at
         least a majority of such Second Priority Claims.

<PAGE>

                                                                               7

                   "Second Priority Claims" means all Obligations in respect of
         the Notes or arising under the Second Priority Documents or any of
         them. Second Priority Claims shall include all interest accrued (or
         which would, absent the commencement of an Insolvency or Liquidation
         Proceeding, accrue) after the commencement of an Insolvency or
         Liquidation Proceeding in accordance with and at the rate specified in
         the relevant Second Priority Document whether or not the claim for such
         interest is allowed as a claim in such Insolvency or Liquidation
         Proceeding. To the extent any payment with respect to the Second
         Priority Claims (whether by or on behalf of any Grantor, as proceeds of
         security, enforcement of any right of setoff or otherwise) is declared
         to be fraudulent or preferential in any respect, set aside or required
         to be paid to a debtor in possession, trustee, receiver or similar
         Person, then the obligation or part thereof originally intended to be
         satisfied shall be deemed to be reinstated and outstanding as if such
         payment had not occurred.

                  "Second Priority Collateral" means all of the assets of any
         Grantor, whether real, personal or mixed, with respect to which a Lien
         is granted or held as security for any Second Priority Claim.

                  "Second Priority Collateral Documents" means the Second
         Priority Security Agreement, the Second Priority Mortgages and any
         other document or instrument pursuant to which a Lien is granted by any
         Grantor to secure any Second Priority Claims or under which rights or
         remedies with respect to any such Lien are governed.

                  "Second Priority Documents" means (a) the Indenture, the
         Notes, the Second Priority Collateral Documents and each of the other
         agreements, documents or instruments evidencing or governing any Other
         Second-Lien Obligations and (b) any other related documents or
         instruments executed and delivered pursuant to any Second Priority
         Document described in clause (a) above evidencing or governing any
         Obligations thereunder.

                  "Second Priority Lenders" means the Persons holding Second
         Priority Claims, including the Noteholders, the Trustee, the other
         Second Priority Agents, if any, and any other agent, representative or
         Second Priority Agent for any of the foregoing.

                   "Second Priority Mortgages" means a collective reference to
         each mortgage, deed of trust, deed to secure debt and any other
         document or instrument under which any Lien on real property owned by
         any Grantor is granted to secure any Second Priority Claims or under
         which rights or remedies with respect to any such Liens are governed.

                   "Second Priority Security Agreement" means the Collateral
         Agreement, dated as of June 19, 2003, among the Company, the other
         Grantors and the Trustee.

                  "Senior Credit Agreement" means the Existing Credit Agreement;
         provided that if at any time a Discharge of First Priority Claims
         occurs with respect to the Existing Credit Agreement (without giving
         effect to Section 5.6), then, to the extent provided in Section 5.6,
         the term "Senior Credit Agreement" means the First-Lien Credit Facility
         designated

<PAGE>

                                                                               8

         by the Company as the "Senior Credit Agreement" in accordance with such
         Section (it being understood that only one Senior Credit Agreement may
         be in effect at any time).

                  "Subsidiary" means any "Subsidiary" of the Company, as defined
         in the Indenture or the Senior Credit Agreement.

                  "Trustee" means Wachovia Bank, National Association, in its
         capacity as trustee under the Indenture and collateral agent under the
         Second Priority Collateral Documents, and also includes its successors
         hereunder as collateral agent or trustee for the Noteholders.

                  "Uniform Commercial Code" or "UCC" means the Uniform
         Commercial Code as from time to time in effect in the State of New
         York.

                  (b) Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (i) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified, (ii) any reference herein to any Person
shall be construed to include such Person's successors and assigns, (iii) the
words "herein", "hereof" and "hereunder", and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular
provision hereof, (iv) all references herein to Sections shall be construed to
refer to Sections of this Agreement and (v) the words "asset" and "property"
shall be construed to have the same meaning and effect and to refer to any and
all tangible and intangible assets and properties, including cash, securities,
accounts and contract rights. When used in reference to a Second Priority Agent,
the phrase "applicable Second Priority Lenders" shall mean the Second Priority
Lenders for whom such Second Priority Agent acts as agent, trustee or
representative; the phrase "applicable Second Priority Document" means the
Second Priority Documents under which such Second Priority Agent acts as agent,
trustee or representative; and the phrase "applicable Second Priority Claims"
means the Second Priority Claims of such Second Priority Agent and the Second
Priority Lenders for whom it acts as agent, trustee or representative.

         SECTION 2. Lien Priorities

                  2.1 Subordination. Notwithstanding the date, manner or order
of grant, attachment or perfection of any Liens granted to the Second Priority
Agents or the Second Priority Lenders on the Common Collateral or of any Liens
granted to the Credit Agent or the First Priority Lenders on the Common
Collateral and notwithstanding any provision of the UCC or any other applicable
law or the Second Priority Documents or the First Priority Documents or any
other circumstance whatsoever, each Second Priority Agent, on behalf of itself
and the applicable Second Priority Lenders, hereby agrees that: (a) any Lien on
the Common Collateral securing any First Priority Claims now or hereafter held
by or on behalf of the Credit Agent or any First Priority Lenders or any agent
or trustee therefor shall be senior in all respects and prior

<PAGE>

                                                                               9

to any Lien on the Common Collateral securing any of the Second Priority Claims;
and (b) any Lien on the Common Collateral now or hereafter held by or on behalf
of any Second Priority Agent or any Second Priority Lenders or any agent or
trustee therefor regardless of how acquired, whether by grant, statute,
operation of law, subrogation or otherwise, shall be junior and subordinate in
all respects to all Liens on the Common Collateral securing any First Priority
Claims. All Liens on the Common Collateral securing any First Priority Claims
shall be and remain senior in all respects and prior to all Liens on the Common
Collateral securing any Second Priority Claims for all purposes, whether or not
such Liens securing any First Priority Claims are subordinated to any Lien
securing any other obligation of the Company, any other Grantor or any other
Person.

                  2.2 Prohibition on Contesting Liens. Each of the Second
Priority Agents, for itself and on behalf of each applicable Second Priority
Lender, and the Credit Agent, for itself and on behalf of each First Priority
Lender it represents, agrees that it shall not (and hereby waives any right to)
contest or support any other Person in contesting, in any proceeding (including
any Insolvency or Liquidation Proceeding), the priority, validity or
enforceability of a Lien held by or on behalf of any of the First Priority
Lenders in the First Priority Collateral or by or on behalf of any of the Second
Priority Lenders in the Common Collateral, as the case may be; provided that
nothing in this Agreement shall be construed to prevent or impair the rights of
the Credit Agent or any First Priority Lender to enforce this Agreement,
including the priority of the Liens securing the First Priority Claims as
provided in Section 2.1.

                  2.3 No New Liens. So long as the Discharge of First Priority
Claims has not occurred, (a) the parties hereto agree that, after the date
hereof, if any Second Priority Agent shall hold any Lien on any assets of the
Company or any other Grantor securing any Second Priority Obligations that are
not also subject to the first-priority Lien of the Credit Agent under the First
Priority Documents, such Second Priority Agent, upon demand by the Credit Agent
or the Company, will either release such Lien or assign it to the Credit Agent
as security for the First Priority Claims (and such Second Priority Agent may
retain a subordinated Lien securing Second Priority Claims in accordance with
this Agreement if so assigned), and (b) the Company agrees that it will not, and
will not permit any Subsidiary to, grant or permit to exist any Lien on any
assets of the Company or any of its Subsidiaries to secure any Second Priority
Claim unless a perfected prior Lien on the same assets has been granted to
secure the First Priority Claims.

                  2.4 Effectiveness. No First Lien Lender or Second Lien Lender
shall have any rights or obligations under this Agreement unless it (or its
trustee, administrative agent or collateral agent on its behalf) shall have, at
the request of the then Credit Agent under the Senior Credit Agreement, executed
and delivered to such Credit Agent an agreement to be bound by the provisions of
this Agreement in form and at such time reasonably satisfactory to such Credit
Agent, and no Obligations (other than Obligations in respect of the Existing
Credit Agreement and related First Priority Documents and Obligations in respect
of the Notes and related Second Priority Documents) shall be deemed First
Priority Claims or Second Priority Claims unless such joinder is executed and
delivered in the form requested by such Credit Agent.

         SECTION 3. Enforcement

                  3.1 Exercise of Remedies

<PAGE>

                                                                              10

                  (a) So long as the Discharge of First Priority Claims has not
         occurred, whether or not any Insolvency or Liquidation Proceeding has
         been commenced by or against the Company or any other Grantor, (i) the
         Second Priority Agents and the Second Priority Lenders will not
         exercise or seek to exercise any rights or remedies (including set-off)
         with respect to any Common Collateral, institute any action or
         proceeding with respect to such rights or remedies (including any
         action of foreclosure), contest, protest or object to any foreclosure
         proceeding or action brought by the Credit Agent or any First Priority
         Lender, the exercise of any right under any lockbox agreement, control
         agreement, blocked account agreement, landlord waiver or bailee's
         letter or similar agreement or arrangement to which any Second Priority
         Agent or any Second Priority Lender is a party, or any other exercise
         by any such Person, of any rights and remedies relating to the Common
         Collateral under the First Priority Documents or otherwise, or object
         to the forbearance by the First Priority Lenders from bringing or
         pursuing any foreclosure proceeding or action or any other exercise of
         any rights or remedies relating to the Common Collateral and (ii) the
         Credit Agent and the First Priority Lenders shall have the exclusive
         right to enforce rights, exercise remedies (including set-off and the
         right to credit bid their debt) and make determinations regarding the
         release, disposition, or restrictions with respect to the Common
         Collateral without any consultation with or the consent of any Second
         Priority Agent or any Second Priority Lender; provided, that (A) in any
         Insolvency or Liquidation Proceeding commenced by or against the
         Company or any Grantor, a Second Priority Agent may file a claim or
         statement of interest with respect to the Second Priority Claims, and
         (B) a Second Priority Agent may take any action (not adverse to the
         prior Liens on the Common Collateral securing the First Priority
         Claims, or the rights of the Credit Agent or the First Priority Lenders
         to exercise remedies in respect thereof) in order to preserve or
         protect its Lien on the Common Collateral. In exercising rights and
         remedies with respect to the Common Collateral, the Credit Agent and
         the First Priority Lenders may enforce the provisions of the First
         Priority Documents and exercise remedies thereunder, all in such order
         and in such manner as they may determine in the exercise of their sole
         discretion. Such exercise and enforcement shall include the rights of
         an agent appointed by them to sell or otherwise dispose of Common
         Collateral upon foreclosure, to incur expenses in connection with such
         sale or disposition, and to exercise all the rights and remedies of a
         secured lender under the Uniform Commercial Code and under the
         comparable law of any applicable jurisdiction and of a secured creditor
         under Bankruptcy Laws of any applicable jurisdiction.

                  (b) Each Second Priority Agent, on behalf of itself and the
         applicable Second Priority Lenders, agrees that it will not take or
         receive, directly or indirectly, in cash or other property or by
         setoff, counterclaim or in any other manner (whether pursuant to any
         enforcement, collection, execution, levy or foreclosure proceeding or
         otherwise), any Common Collateral or any proceeds of Common Collateral,
         in each case in connection with the exercise of any right or remedy
         (including set-off) with respect to any Common Collateral (or in
         respect of any Common Collateral in the event of the occurrence of an
         Insolvency or Liquidation Proceeding with respect to a Grantor), unless
         and until the Discharge of First Priority Claims has occurred. Without
         limiting the generality of the foregoing, unless and until the
         Discharge of First Priority Claims has occurred, except as expressly
         provided in the proviso in clause (ii) of Section 3.1(a)

<PAGE>

                                                                              11

         above, the sole right of the Second Priority Agents and the Second
         Priority Lenders with respect to the Common Collateral is to hold a
         Lien on the Common Collateral pursuant to the Second Priority Documents
         for the period and to the extent granted therein and to receive a share
         of the proceeds thereof, if any, after the Discharge of the First
         Priority Claims has occurred.

                  (c) Subject to the proviso in clause (ii) of Section 3.1(a)
         above and without limiting the effect of other provisions of this
         Agreement, (i) each Second Priority Agent, for itself and on behalf of
         the applicable Second Priority Lenders, agrees that such Second
         Priority Agent and the applicable Second Priority Lenders will not take
         any action that would hinder any exercise of remedies undertaken by the
         Credit Agent under the First Priority Documents, including any sale,
         lease, exchange, transfer or other disposition of the Common
         Collateral, whether by foreclosure or otherwise, and (ii) each Second
         Priority Agent, for itself and on behalf of the applicable Second
         Priority Lenders, hereby waives any and all rights it or the applicable
         Second Priority Lenders may have as a junior lien creditor to object to
         the manner in which the Credit Agent or the First Priority Lenders seek
         to enforce or collect the First Priority Claims or the Liens granted in
         any of the First Priority Collateral, regardless of whether any action
         or failure to act by or on behalf of the Credit Agent or First Priority
         Lenders is adverse to the interest of the Second Priority Lenders.

                  (d) Each Second Priority Agent, on behalf of itself and the
         applicable Second Priority Lenders, hereby acknowledges and agrees that
         no covenant, agreement or restriction contained in any Second Priority
         Document shall be deemed to restrict in any way the rights and remedies
         of the Credit Agent or the First Priority Lenders with respect to the
         Common Collateral as set forth in this Agreement and the First Priority
         Documents.

                  3.2 Cooperation. Subject to the proviso in clause (ii) of
Section 3.1(a) above, each Second Priority Agent, on behalf of itself and the
applicable Second Priority Lenders, agrees that, unless and until the Discharge
of First Priority Claims has occurred, it will not commence, or join with any
Person (other than the First Priority Lenders and the Credit Agent upon the
request thereof) in commencing, any enforcement, collection, execution, levy or
foreclosure action or proceeding with respect to any Lien held by it under any
of the Second Priority Documents or otherwise.

         SECTION 4. Payments

                  4.1 Application of Proceeds. As long as the Discharge of First
Priority Claims has not occurred, the Common Collateral or proceeds thereof
received in connection with the sale or other disposition of, or collection on,
such Common Collateral upon the exercise of remedies (or in respect of any
Common Collateral in the event of the occurrence of an Insolvency or Liquidation
Proceeding with respect to a Grantor), shall be applied by the Credit Agent to
the First Priority Claims in such order as specified in the relevant First
Priority Documents (or, if an order is not specified in the First Priority
Documents, in such order determined by the Credit Agent in its sole discretion)
until the Discharge of First Priority Claims has occurred. Upon the Discharge of
the First Priority Claims, the Credit Agent shall deliver to

<PAGE>

                                                                              12

the Designated Second Priority Agent (or to the Company if there is no
Designated Second Priority Agent at the time) or as a court of competent
jurisdiction may otherwise direct any proceeds of Common Collateral held by it
in the same form as received, with any necessary endorsements or as a court of
competent jurisdiction may otherwise direct to be applied, if applicable, by the
Designated Second Priority Agent to the Second Priority Claims in accordance
with the respective rights of the respective Second Priority Agents therefor.

                  4.2 Payments Over. Any Common Collateral or proceeds thereof
(or amounts in respect thereof) received by any Second Priority Agent or any
Second Priority Lender in connection with the exercise of any right or remedy
(including set-off) relating to the Common Collateral in contravention of this
Agreement shall be segregated and held in trust and forthwith paid over to the
Credit Agent for the benefit of the First Priority Lenders in the same form as
received, with any necessary endorsements or as a court of competent
jurisdiction may otherwise direct. The Credit Agent is hereby authorized to make
any such endorsements as agent for any such Second Priority Agent or any such
Second Priority Lender. This authorization is coupled with an interest and is
irrevocable.

         SECTION 5. Other Agreements

                  5.1 Releases

                  (a) If in connection with:

                           (i) the exercise of the Credit Agent's remedies in
                  respect of the Common Collateral provided for in Section 3.1,
                  including any sale, lease, exchange, transfer or other
                  disposition of any such Common Collateral;

                           (ii) any sale, lease, exchange, transfer or other
                  disposition of any Common Collateral permitted under the terms
                  of the Senior Credit Agreement (whether or not an event of
                  default thereunder, and as defined therein, has occurred and
                  is continuing) and permitted or not prohibited under Section
                  4.12 of the Indenture (Limitation on Asset Sales); or

                           (iii) any agreement between the Credit Agent and the
                  Company or any other Grantor which expressly releases the
                  Credit Agent's Lien on any portion of the Common Collateral or
                  to release any Grantor from its obligations under its guaranty
                  of the First Priority Claims; provided that (A) after giving
                  effect to the release, Obligations secured by first priority
                  Liens on the remaining Common Collateral remain outstanding
                  (unless such Obligations are deemed paid in full by the Credit
                  Agent and the Company) and (B) no such release shall be
                  effective against the Second Priority Lenders under the
                  Indenture and the Notes if an Event of Default has occurred
                  and is continuing under the Indenture as of the time of such
                  proposed release and written notice of the occurrence and
                  continuation of such Event of Default is received by the
                  Credit Agent at least one business day prior to such release
                  until such time as such Event of Default is cured or waived
                  unless such release is consented to by the holders of at least
                  a majority in aggregate principal amount of the Notes at the
                  time outstanding;

<PAGE>

                                                                              13

the Credit Agent, for itself or on behalf of any of the First Priority Lenders,
releases any of its Liens on any part of the Common Collateral, the Liens, if
any, of each Second Priority Agent, for itself or for the benefit of the
applicable Second Priority Lenders, on such Common Collateral shall be
automatically, unconditionally and simultaneously released and each Second
Priority Agent, for itself or on behalf of any such applicable Second Priority
Lender, promptly shall execute and deliver to the Credit Agent or such Grantor
such termination statements, releases and other documents as the Credit Agent or
such Grantor may request to effectively confirm such release. The Company shall
promptly advise (i) each Second Priority Agent and the Credit Agent of the
occurrence of an Event of Default and (ii) each Second Priority Agent of any
proposed release of Common Collateral cognizable under Section 5.1(a)(iii).

                  (b) Each Second Priority Agent, for itself and on behalf of
the applicable Second Priority Lenders, hereby irrevocably constitutes and
appoints the Credit Agent and any officer or agent of the Credit Agent, with
full power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of such Second Priority
Agent or such holder or in the Credit Agent's own name, from time to time in the
Credit Agent's discretion, for the purpose of carrying out the terms of this
Section 5.1, to take any and all appropriate action and to execute any and all
documents and instruments which may be necessary or desirable to accomplish the
purposes of this Section 5.1, including any termination statements, endorsements
or other instruments of transfer or release.

                  5.2 Insurance. Unless and until the Discharge of First
Priority Claims has occurred, the Credit Agent and the First Priority Lenders
shall have the sole and exclusive right under the First Priority Documents, to
the extent such a right is granted in the First Priority Documents, to adjust
settlement for any insurance policy covering the Common Collateral in the event
of any loss thereunder and to approve any award granted in any condemnation or
similar proceeding affecting the Common Collateral. Unless and until the
Discharge of First Priority Claims has occurred, all proceeds of any such policy
and any such award if in respect to the Common Collateral shall be paid to the
Credit Agent for the benefit of the First Priority Lenders to the extent
required under the First Priority Documents and thereafter to the Designated
Second Priority Agent (or to the Company is there is no Designated Second
Priority Agent at the time) for the benefit of the Second Priority Lenders to
the extent required under the applicable Second Priority Documents and then to
the owner of the subject property or as a court of competent jurisdiction may
otherwise direct. If any Second Priority Agent or any Second Priority Lender
shall, at any time, receive any proceeds of any such insurance policy or any
such award in contravention of this Agreement, it shall pay such proceeds over
to the Credit Agent in accordance with the terms of Section 4.2.

                  5.3 Amendments to Second Priority Documents

                  (a) Without the prior written consent of the Credit Agent and
         the Required Lenders, no Second Priority Collateral Document may be
         amended, supplemented or otherwise modified or entered into to the
         extent such amendment, supplement or modification, or the terms of any
         new Second Priority Collateral Document, would be prohibited by any of
         the terms of the First Priority Documents. Each Second Priority Agent
         agrees that each Second Priority Collateral Document shall

<PAGE>

                                                                              14

         include the following language (or language to similar effect approved
         by the Credit Agent):

                  "Notwithstanding anything herein to the contrary, the lien and
                  security interest granted to the [Insert title of Second
                  Priority Agent] pursuant to this Agreement and the exercise of
                  any right or remedy by the [Insert title of Second Priority
                  Agent] hereunder are subject to the provisions of the
                  Intercreditor Agreement, dated as of June 19, 2003 (as
                  amended, supplemented or otherwise modified from time to time,
                  the "Intercreditor Agreement"), among Tenneco Automotive Inc.,
                  JPMorgan Chase Bank, as Credit Agent, and Wachovia Bank,
                  National Association, as Trustee. In the event of any conflict
                  between the terms of the Intercreditor Agreement and this
                  Agreement, the terms of the Intercreditor Agreement shall
                  govern."

In addition, each Second Priority Agent agrees that each Second Priority
Mortgage covering any Common Collateral shall contain such other language as the
Credit Agent may reasonably request to reflect the subordination of such Second
Priority Mortgage to the First Priority Collateral Document covering such Common
Collateral.

                  (b) In the event the Credit Agent or the First Priority
         Lenders enter into any amendment, waiver or consent in respect of any
         of the First Priority Collateral Documents for the purpose of adding
         to, or deleting from, or waiving or consenting to any departures from
         any provisions of, any First Priority Collateral Document or changing
         in any manner the rights of the Credit Agent, the First Priority
         Lenders, the Company or any other Grantor thereunder, then such
         amendment, waiver or consent shall apply automatically to any
         comparable provision of the Comparable Second Priority Collateral
         Document without the consent of any Second Priority Agent or any Second
         Priority Lenders and without any action by any Second Priority Agent,
         the Company or any other Grantor, provided, that (A) no such amendment,
         waiver or consent shall have the effect of removing assets subject to
         the Lien of the Second Priority Collateral Documents, except to the
         extent that a release of such Lien is permitted by Section 5.1, (B)
         notice of such amendment, waiver or consent shall have been given to
         the applicable Second Priority Agent and (C) no such amendment, waiver,
         or consent shall be effective to amend or waive a Comparable Second
         Priority Collateral Document if it shall materially adversely affect
         the rights of the Second Priority Lenders unless such change, waiver or
         modification materially adversely affects the rights of the First
         Priority Lenders in a like or similar manner (it being understood that
         amendments, waivers and consents which have the effect of adding
         collateral, adding remedies or enhancing the ability of the First
         Priority Lenders to exercise remedies or perfect security interests in
         collateral shall be deemed not to be materially adverse to the Second
         Priority).

                  5.4 Rights As Unsecured Creditors. Notwithstanding anything to
the contrary in this Agreement, each of the Second Priority Agents and the
Second Priority Lenders may exercise rights and remedies as an unsecured
creditor against the Company or any Subsidiary that has guaranteed the Second
Priority Obligations in accordance with the terms of the Second Priority
Documents and applicable law. Nothing in this Agreement shall prohibit the
receipt by any Second Priority Agent or any Second Priority Lenders of the
required payments of interest,

<PAGE>

                                                                              15

premium, if any, and principal on the Second Priority Claims and related fees
and expenses so long as such receipt is not the direct or indirect result of the
exercise by any Second Priority Agent or any Second Priority Lender of rights or
remedies as a secured creditor or enforcement in contravention of this Agreement
of any Lien held by any of them (or received or paid in respect of any Common
Collateral in the event of the occurrence of an Insolvency or Liquidation
Proceeding with respect to a Grantor). In the event any Second Priority Agent or
any Second Priority Lender becomes a judgment lien creditor in respect of Common
Collateral as a result of its enforcement of its rights as an unsecured
creditor, such judgment lien shall be subordinated to the Liens securing First
Priority Claims on the same basis as the other Liens securing the Second
Priority Claims are so subordinated to such First Priority Claims under this
Agreement. Nothing in this Agreement impairs or otherwise adversely affects any
rights or remedies the Credit Agent or the First Priority Lenders may have with
respect to the First Priority Collateral.

                  5.5 Bailee for Perfection

                  (a) The Credit Agent agrees to hold the Pledged Collateral
         that is part of the Common Collateral in its possession or control (or
         in the possession or control of its agents or bailees) as bailee for
         the applicable Second Priority Agents and any assignee solely for the
         purpose of perfecting the security interest granted in such Pledged
         Collateral pursuant to the Second Priority Security Documents, subject
         to the terms and conditions of this Section 5.5.

                  (b) Until the Discharge of First Priority Claims has occurred,
         the Credit Agent shall be entitled to deal with the Pledged Collateral
         in accordance with the terms of the First Priority Documents as if the
         Liens of the Second Priority Agents under the Second Priority
         Collateral Documents did not exist. The rights of the Second Priority
         Agents shall at all times be subject to the terms of this Agreement and
         to the Credit Agent's rights under the First Priority Documents.

                  (c) The Credit Agent shall have no obligation whatsoever to
         the Second Priority Agents or any Second Priority Lender to assure that
         the Pledged Collateral is genuine or owned by any of the Grantors or to
         preserve rights or benefits of any Person except as expressly set forth
         in this Section 5.5. The duties or responsibilities of the Credit Agent
         under this Section 5.5 shall be limited solely to holding the Pledged
         Collateral as bailee for the applicable Second Priority Agents for
         purposes of perfecting the Lien held by such Second Priority Agents.

                  (d) The Credit Agent shall not have by reason of the Second
         Priority Collateral Documents or this Agreement or any other document a
         fiduciary relationship in respect of any Second Priority Agent or any
         Second Priority Lender.

                  (e) Upon the Discharge of First Priority Claims, the Credit
         Agent shall deliver to the Designated Second Priority Agent (or to the
         Company if there is no Designated Second Priority Agent at the time)
         the remaining Pledged Collateral (if any) together with any necessary
         endorsements (or otherwise allow the Designated Second Priority Agent,
         if applicable, to obtain control of such Pledged Collateral) or as a
         court of competent jurisdiction may otherwise direct.

<PAGE>

                                                                              16

                  5.6 When Discharge of First Priority Claims Deemed to Not Have
Occurred. If at any time after the Discharge of First Priority Claims has
occurred the Company designates any other First-Lien Credit Facility to be the
"Senior Credit Agreement" hereunder, then such Discharge of First Priority
Claims shall automatically be deemed not to have occurred for all purposes of
this Agreement (other than with respect to any actions taken prior to the date
of such designation as a result of the occurrence of such first Discharge of
First Priority Claims), and such other First-Lien Credit Facility shall
automatically be treated as the Senior Credit Agreement for all purposes of this
Agreement, including for purposes of the Lien priorities and rights in respect
of Common Collateral set forth herein. Upon receipt of notice of such
designation (including the identity of the new Credit Agent), the Second
Priority Agent shall promptly (i) enter into such documents and agreements
(including amendments or supplements to this Agreement) as the Company or such
new Credit Agent shall request in order to provide to the new Credit Agent the
rights of the Credit Agent contemplated hereby and (ii) deliver to the Credit
Agent the Pledged Collateral together with any necessary endorsements (or
otherwise allow such Credit Agent to obtain control of such Pledged Collateral).

                  5.7 Cooperation. Upon request of the Credit Agent from time to
time, each Second Priority Agent shall promptly disclose to the Collateral Agent
all information in its possession reasonably requested by the Credit Agent with
respect to the Second Priority Collateral, including the identity of the
Grantors and guarantors of any Second Priority Obligations and the description,
location and timing of perfection of Liens purported to be created on the Second
Priority Collateral to secure Second Priority Claims and shall promptly deliver
to the Credit Agent copies of the Second Priority Documents and other documents
relating to the Second Priority Collateral, such as Uniform Commercial Code
Financing Statements and record copies of Second Priority Collateral Documents.

         SECTION 6. Insolvency or Liquidation Proceedings

                  6.1 Financing Issues. If the Company or any other Grantor
shall be subject to any Insolvency or Liquidation Proceeding and the Credit
Agent shall desire to permit the use of cash collateral or to permit the Company
or any other Grantor to obtain financing under Section 363 or Section 364 of
Title 11 of the United States Code or any similar Bankruptcy Law ("DIP
Financing"), then each Second Priority Agent, on behalf of itself and the
applicable Second Priority Lenders, agrees that it will raise no objection to
such use of cash collateral or DIP Financing and will not request adequate
protection or any other relief in connection therewith (except to the extent
permitted by Section 6.3) and, to the extent the Liens securing the First
Priority Claims are subordinated or pari passu with such DIP Financing, will
subordinate its Liens in the Common Collateral to such DIP Financing (and all
Obligations relating thereto) on the same basis as the Liens securing the Second
Priority Claims are subordinated to First Priority Claims under this Agreement.

                  6.2 Relief from the Automatic Stay. Until the Discharge of
First Priority Claims has occurred, each Second Priority Agent, on behalf of
itself and the applicable Second Priority Lenders, agrees that none of them
shall seek relief from the automatic stay or any other stay in any Insolvency or
Liquidation Proceeding in respect of the Common Collateral, without the prior
written consent of the Credit Agent and the Required Lenders.

<PAGE>

                                                                              17

                  6.3 Adequate Protection. Each Second Priority Agent, on behalf
of itself and the applicable Second Priority Lenders, agrees that none of them
shall contest (or support any other Person contesting) (a) any request by the
Credit Agent or the First Priority Lenders for adequate protection or (b) any
objection by the Credit Agent or the First Priority Lenders to any motion,
relief, action or proceeding based on the Credit Agent or the First Priority
Lenders claiming a lack of adequate protection. Notwithstanding the foregoing
contained in this Section 6.3, in any Insolvency or Liquidation Proceeding, (i)
if the First Priority Lenders (or any subset thereof) are granted adequate
protection in the form of additional collateral in connection with any DIP
Financing or use of cash collateral under Section 363 or Section 364 of Title 11
of the United States Code or any similar Bankruptcy Law, then each Second
Priority Agent, on behalf of itself or any of the applicable Second Priority
Lenders, may seek or request adequate protection in the form of a replacement
Lien on such additional collateral, which Lien, if any, shall be subordinated to
the Liens securing the First Priority Claims and such DIP Financing (and all
Obligations relating thereto) on the same basis as the other Liens securing the
Second Priority Claims are so subordinated to the First Priority Claims under
this Agreement, and (ii) in the event a Second Priority Agent, on behalf of
itself and the Second Priority Lenders, seeks or requests adequate protection
and such adequate protection is granted in the form of additional collateral,
then such Second Priority Agent, on behalf of itself or any of the applicable
Second Priority Lenders, agrees that the Credit Agent shall also be granted a
senior Lien on such additional collateral as security for the First Priority
Claims and any such DIP Financing and that any Lien on such additional
collateral securing the Second Priority Claims shall be subordinated to the
Liens on such collateral securing the First Priority Claims and any such DIP
Financing (and all Obligations relating thereto) and any other Liens granted to
the First Priority Lenders as adequate protection on the same basis as the other
Liens securing the Second Priority Claims are so subordinated to such First
Priority Claims under this Agreement.

                  6.4 No Waiver. Nothing contained herein shall prohibit or in
any way limit the Credit Agent or any First Priority Lender from objecting in
any Insolvency or Liquidation Proceeding or otherwise to any action taken by any
Second Priority Agent or any of the Second Priority Lenders, including the
seeking by any Second Priority Agent or any Second Priority Lender of adequate
protection (other than as allowed pursuant to Section 6.3 of this Agreement) or
the asserting by any Second Priority Agent or any Second Priority Lender of any
of its rights and remedies under the Second Priority Documents or otherwise.

                  6.5 Preference Issues. If any First Priority Lender is
required in any Insolvency or Liquidation Proceeding or otherwise to turn over
or otherwise pay to the estate of the Company or any other Grantor any amount (a
"Recovery"), then the First Priority Claims shall be reinstated to the extent of
such Recovery and the First Priority Lenders shall be entitled to receive
payment in full in cash (including, in the case of any letter of credit, cash
collateral therefor) with respect to all such recovered amounts. If this
Agreement shall have been terminated prior to such Recovery, this Agreement
shall be reinstated in full force and effect, and such prior termination shall
not diminish, release, discharge, impair or otherwise affect the obligations of
the parties hereto.

<PAGE>

                                                                              18

         SECTION 7. Reliance; Waivers; Etc.

                  7.1 Reliance. The consent by the First Priority Lenders to the
execution and delivery of the Second Priority Documents and the grant to any
Second Priority Agent on behalf of the applicable Second Priority Lenders of a
Lien on the Common Collateral and all loans and other extensions of credit made
or deemed made on and after the date hereof by the First Priority Lenders to the
Company or any Grantor shall be deemed to have been given and made in reliance
upon this Agreement. Each Second Priority Agent, on behalf of itself and the
applicable Second Priority Lenders, acknowledges that it and such Second
Priority Lenders have, independently and without reliance on the Credit Agent or
any First Priority Lender, and based on documents and information deemed by them
appropriate, made their own credit analysis and decision to enter into the
Indenture, this Agreement and the transactions contemplated hereby and thereby
and they will continue to make their own credit decision in taking or not taking
any action under the Indenture or this Agreement.

                  7.2 No Warranties or Liability. Each Second Priority Agent, on
behalf of itself and the applicable Second Priority Lenders, acknowledges and
agrees that each of the Credit Agent and the First Priority Lenders have made no
express or implied representation or warranty, including with respect to the
execution, validity, legality, completeness, collectibility or enforceability of
any of the First Priority Documents, the ownership of any Common Collateral or
the perfection or priority of any Liens thereon. The First Priority Lenders will
be entitled to manage and supervise their respective loans and extensions of
credit under the First Priority Documents as they may, in their sole discretion,
deem appropriate, and the First Priority Lenders may manage their loans and
extensions of credit without regard to any rights or interests that any Second
Priority Agent or any of the Second Priority Lenders have in the Common
Collateral or otherwise, except as otherwise provided in this Agreement. Neither
the Credit Agent nor any First Priority Lender shall have any duty to any Second
Priority Agent or any of the Second Priority Lenders to act or refrain from
acting in a manner which allows, or results in, the occurrence or continuance of
an event of default or default under any agreements with the Company or any
Subsidiary thereof (including the Second Priority Documents), regardless of any
knowledge thereof which they may have or be charged with.

                  7.3 No Waiver of Lien Priorities

                  (a) No right of the First Priority Lenders, the Credit Agent
         or any of them to enforce any provision of this Agreement or any First
         Priority Document shall at any time in any way be prejudiced or
         impaired by any act or failure to act on the part of the Company or any
         other Grantor or by any act or failure to act by any First Priority
         Lender or the Credit Agent, or by any noncompliance by any Person with
         the terms, provisions and covenants of this Agreement, any of the First
         Priority Documents or any of the Second Priority Documents, regardless
         of any knowledge thereof which the Credit Agent or the First Priority
         Lenders, or any of them, may have or be otherwise charged with;

                  (b) Without in any way limiting the generality of the
         foregoing paragraph, the First Priority Lenders, the Credit Agent and
         any of them, may, at any time and from time to time, without the
         consent of, or notice to, any Second Priority Agent or

<PAGE>

                                                                              19

         any Second Lien Lender, without incurring any liabilities to any Second
         Priority Agent or any Second Lien Lender and without impairing or
         releasing the Lien priorities and other benefits provided in this
         Agreement (even if any right of subrogation or other right or remedy of
         any Second Priority Agent or any Second Lien Lender is affected,
         impaired or extinguished thereby) do any one or more of the following:

                           (i) change the manner, place or terms of payment or
                  change or extend the time of payment of, or amend, renew,
                  exchange, increase or alter, the terms of any of the First
                  Priority Claims or any Lien on any First Priority Collateral
                  or guaranty thereof or any liability of the Company or any
                  other Grantor, or any liability incurred directly or
                  indirectly in respect thereof (including any increase in or
                  extension of the First Priority Claims, without any
                  restriction as to the amount, tenor or terms of any such
                  increase or extension) or otherwise amend, renew, exchange,
                  extend, modify or supplement in any manner any Liens held by
                  the Credit Agent or any of the First Priority Lenders, the
                  First Priority Claims or any of the First Priority Documents;

                           (ii) sell, exchange, release, surrender, realize
                  upon, enforce or otherwise deal with in any manner and in any
                  order any part of the First Priority Collateral or any
                  liability of the Company or any other Grantor to the First
                  Priority Lenders or the Credit Agent, or any liability
                  incurred directly or indirectly in respect thereof;

                           (iii) settle or compromise any First Priority Claim
                  or any other liability of the Company or any other Grantor or
                  any security therefor or any liability incurred directly or
                  indirectly in respect thereof and apply any sums by whomsoever
                  paid and however realized to any liability (including the
                  First Priority Claims) in any manner or order;

                           (iv) subordinate the priority of the First Priority
                  Lien held by any First Priority Lender to the priority of the
                  First Priority Lien held by any other Lender;

                           (v) enter into or amend any First Priority Document
                  in order to create or acquire additional collateral for the
                  First Priority Claims, to create and perfect security
                  interests in and Liens on collateral and to increase and
                  enhance the exercise of remedies thereunder and take actions
                  in furtherance of the foregoing; and

                           (vi) exercise or delay in or refrain from exercising
                  any right or remedy against the Company or any security or any
                  other Grantor or any other Person, elect any remedy and
                  otherwise deal freely with the Company, any other Grantor or
                  any First Priority Collateral and any security and any
                  guarantor or any liability of the Company or any other Grantor
                  to the First Priority Lenders or any liability incurred
                  directly or indirectly in respect thereof.

<PAGE>

                                                                              20

                  (c) Each Second Priority Agent, on behalf of itself and the
         applicable Second Priority Lenders, also agrees that the First Priority
         Lenders and the Credit Agent shall have no liability to any Second
         Priority Agent or any Second Priority Lender, and each Second Priority
         Agent, on behalf of itself and the applicable Second Priority Lenders,
         hereby waives any claim against any First Priority Lender or the Credit
         Agent, arising out of any and all actions which the First Priority
         Lenders or the Credit Agent may take or permit or omit to take with
         respect to: (i) the First Priority Documents, (ii) the collection of
         the First Priority Claims or (iii) the foreclosure upon, or sale,
         liquidation or other disposition of, any First Priority Collateral.
         Each Second Priority Agent, on behalf of itself and the applicable
         Second Priority Lenders, agrees that the First Priority Lenders and the
         Credit Agent have no duty to them in respect of the maintenance or
         preservation of the First Priority Collateral, the First Priority
         Claims or otherwise; and

                  (d) Each Second Priority Agent, on behalf of itself and the
         applicable Second Priority Lenders, agrees not to assert and hereby
         waives, to the fullest extent permitted by law, any right to demand,
         request, plead or otherwise assert or otherwise claim the benefit of,
         any marshalling, appraisal, valuation or other similar right that may
         otherwise be available under applicable law or any other similar rights
         a junior secured creditor may have under applicable law.

                  7.4 Obligations Unconditional. All rights, interests,
agreements and obligations of the Credit Agent and the First Priority Lenders
and the Second Priority Agents and the Second Priority Lenders, respectively,
hereunder shall remain in full force and effect irrespective of:

                  (a) any lack of validity or enforceability of any First
         Priority Documents or any Second Priority Documents;

                  (b) any change in the time, manner or place of payment of, or
         in any other terms of, all or any of the First Priority Claims or
         Second Priority Claims, or any amendment or waiver or other
         modification, including any increase in the amount thereof, whether by
         course of conduct or otherwise, of the terms of the Senior Credit
         Agreement or any other First Priority Document or of the terms of the
         Indenture or any other Second Priority Document;

                  (c) any exchange of any security interest in any Common
         Collateral or any other collateral, or any amendment, waiver or other
         modification, whether in writing or by course of conduct or otherwise,
         of all or any of the First Priority Claims or Second Priority Claims or
         any guarantee thereof;

                  (d) the commencement of any Insolvency or Liquidation
         Proceeding in respect of the Company or any other Grantor; or

                  (e) any other circumstances which otherwise might constitute a
         defense available to, or a discharge of, the Company or any other
         Grantor in respect of the First Priority Claims, or of any Second
         Priority Agent or any Second Priority Lender in respect of this
         Agreement.

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