Document:

Exhibit 10.6

 

 

THIS GUARANTEE AND COLLATERAL
AGREEMENT is subject to the terms
and provisions of the Intercreditor Agreement, dated as of June 16, 2010 (as such agreement may be amended, restated,
amended and restated, supplemented or otherwise modified from time to time, the
“Intercreditor Agreement”), among Royal Bank of Canada, as the Term
Loan Collateral Agent, PNC Bank, National Association, as the Revolving Credit
Collateral Agent and the Grantors
(as defined below)

 

 

GUARANTEE AND COLLATERAL AGREEMENT

 

made by

 

TRIUMPH GROUP, INC.

 

and certain of its Subsidiaries

 

in favor of

 

ROYAL BANK OF CANADA,

 

as Administrative Agent

 

Dated as of June 16, 2010

 

 

 

TABLE OF CONTENTS

	
   

  	
   

  	
  Page

  
	
  SECTION 1.

  	
  DEFINED TERMS

  	
  3

  
	
  1.1

  	
  Definitions

  	
  3

  
	
  1.2

  	
  Other Definitional Provisions

  	
  6

  
	
   

  	
   

  	
   

  
	
  SECTION 2.

  	
  GUARANTEE

  	
  7

  
	
  2.1

  	
  Guarantee

  	
  7

  
	
  2.2

  	
  Right of Contribution

  	
  7

  
	
  2.3

  	
  No Subrogation

  	
  8

  
	
  2.4

  	
  Amendments, etc. with respect to the Borrower
  Obligations

  	
  8

  
	
  2.5

  	
  Guarantee Absolute and Unconditional

  	
  8

  
	
  2.6

  	
  Reinstatement

  	
  9

  
	
  2.7

  	
  Payments

  	
  9

  
	
   

  	
   

  	
   

  
	
  SECTION 3.

  	
  GRANT OF SECURITY INTEREST

  	
  9

  
	
   

  	
   

  	
   

  
	
  SECTION 4.

  	
  REPRESENTATIONS AND WARRANTIES

  	
  11

  
	
  4.1

  	
  Title; No Other Liens

  	
  11

  
	
  4.2

  	
  Perfected First Priority Liens

  	
  11

  
	
  4.3

  	
  Jurisdiction of Organization; Chief Executive Office

  	
  11

  
	
  4.4

  	
  Inventory and Equipment

  	
  11

  
	
  4.5

  	
  Farm Products

  	
  11

  
	
  4.6

  	
  Investment Property

  	
  11

  
	
  4.7

  	
  [RESERVED]

  	
  12

  
	
  4.8

  	
  [RESERVED]

  	
  12

  
	
  4.9

  	
  Intellectual Property

  	
  12

  
	
  4.10

  	
  Commercial Tort Claims

  	
  13

  
	
   

  	
   

  	
   

  
	
  SECTION 5.

  	
  COVENANTS

  	
  13

  
	
  5.1

  	
  Delivery of Instruments, Certificated Securities and
  Chattel Paper

  	
  13

  
	
  5.2

  	
  [Reserved]

  	
  13

  
	
  5.3

  	
  [Reserved]

  	
  13

  
	
  5.4

  	
  Maintenance of Perfected Security Interest; Further
  Documentation

  	
  13

  
	
  5.5

  	
  Changes in Name, etc.

  	
  13

  
	
  5.6

  	
  Notices

  	
  14

  
	
  5.7

  	
  Investment Property

  	
  14

  
	
  5.8

  	
  [RESERVED]

  	
  14

  
	
  5.9

  	
  Intellectual Property

  	
  14

  
	
  5.10

  	
  Commercial Tort Claims

  	
  16

  
	
  5.11

  	
  Further Actions of Grantors

  	
  16

  
	
  5.12

  	
  Compliance with Credit Agreement

  	
  16

  
	
   

  	
   

  	
   

  
	
  SECTION 6.

  	
  REMEDIAL PROVISIONS

  	
  16

  
	
  6.1

  	
  Certain Matters Relating to Receivables

  	
  16

  
	
  6.2

  	
  Communications with Obligors; Grantors Remain Liable

  	
  17

  
	
  6.3

  	
  Pledged Stock

  	
  17

  
	
  6.4

  	
  Proceeds to be Turned Over To Administrative Agent

  	
  18

  

 

i

 

	
  6.5

  	
  Application of Proceeds

  	
  18

  
	
  6.6

  	
  Code and Other Remedies

  	
  18

  
	
  6.7

  	
  Registration Rights

  	
  19

  
	
  6.8

  	
  Subordination

  	
  20

  
	
  6.9

  	
  Deficiency

  	
  20

  
	
   

  	
   

  	
   

  
	
  SECTION 7.

  	
  THE ADMINISTRATIVE AGENT

  	
  20

  
	
  7.1

  	
  Administrative Agent’s Appointment as Attorney-in-Fact, etc.

  	
  20

  
	
  7.2

  	
  Duty of Administrative Agent

  	
  21

  
	
  7.3

  	
  Execution of Financing Statements

  	
  22

  
	
  7.4

  	
  Authority of Administrative Agent

  	
  22

  
	
   

  	
   

  	
   

  
	
  SECTION 8.

  	
  MISCELLANEOUS

  	
  22

  
	
  8.1

  	
  Amendments in Writing

  	
  22

  
	
  8.2

  	
  Notices

  	
  22

  
	
  8.3

  	
  No Waiver by Course of Conduct; Cumulative Remedies

  	
  22

  
	
  8.4

  	
  Enforcement Expenses; Indemnification

  	
  22

  
	
  8.5

  	
  Successors and Assigns

  	
  23

  
	
  8.6

  	
  Set-Off

  	
  23

  
	
  8.7

  	
  Counterparts

  	
  23

  
	
  8.8

  	
  Severability

  	
  23

  
	
  8.9

  	
  Section Headings

  	
  23

  
	
  8.10

  	
  Integration

  	
  23

  
	
  8.11

  	
  GOVERNING LAW

  	
  23

  
	
  8.12

  	
  Submission To Jurisdiction; Waivers

  	
  23

  
	
  8.13

  	
  Acknowledgements

  	
  24

  
	
  8.14

  	
  Additional Grantors

  	
  24

  
	
  8.15

  	
  Releases

  	
  24

  
	
  8.16

  	
  WAIVER OF JURY TRIAL

  	
  25

  
	
  8.17

  	
  Intercreditor Agreement

  	
  25

  
	
   

  	
   

  	
   

  
	
  SCHEDULES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule
  1

  	
  Notice
  Addresses of Guarantors

  	
   

  
	
  Schedule
  2

  	
  Investment
  Property

  	
   

  
	
  Schedule
  3

  	
  Perfection
  Matters

  	
   

  
	
  Schedule
  4

  	
  Jurisdictions
  of Organization and Chief Executive Offices

  	
   

  
	
  Schedule
  5

  	
  Inventory
  and Equipment Locations

  	
   

  
	
  Schedule
  6

  	
  Intellectual
  Property

  	
   

  
	
  Schedule
  7

  	
  Commercial
  Tort Claims

  	
   

  

 

ii

 

GUARANTEE AND COLLATERAL AGREEMENT

 

GUARANTEE
AND COLLATERAL AGREEMENT, dated as of June 16, 2010, 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 Royal Bank of
Canada, as Administrative Agent (in such capacity, the “Administrative Agent”)
for the banks and other financial institutions or entities (the “Lenders”)
from time to time parties to the Credit Agreement, dated as of June 16,
2010 (as amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Triumph Group, Inc. (the “Borrower”), the
Lenders and the Administrative Agent.

 

W I T N E S S E T H:

 

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

 

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

 

WHEREAS,
the proceeds of the extensions of credit under the Credit Agreement will be
used in part to enable the Borrower to make valuable transfers to one or more
of the other Grantors in connection with the operation of their respective
businesses;

 

WHEREAS,
the Borrower and the other Grantors are engaged in related businesses, and each
Grantor will derive substantial direct and indirect benefit from the making of
the extensions of credit under the Credit Agreement; and

 

WHEREAS,
it is a condition precedent to the obligation of the Lenders to make their
respective extensions of credit to the Borrower under the Credit Agreement that
the Grantors shall have executed and delivered this Agreement to the Administrative
Agent for the ratable benefit of the Secured Parties;

 

NOW,
THEREFORE, in consideration of the premises and to induce the Administrative
Agent and the Lenders to enter into the Credit Agreement and to induce the
Lenders to make their respective extensions of credit to the Borrower
thereunder, each Grantor hereby agrees with the Administrative Agent, for the
ratable benefit of the Secured Parties, as follows:

 

SECTION 1.           DEFINED TERMS

 

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

 

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

 

3

 

“Agreement”:  this Guarantee and Collateral Agreement, as
the same may be amended, supplemented or otherwise modified from time to time.

 

“Borrower
Obligations”:  the collective
reference to the unpaid principal of and interest on the Loans made to the
Borrower and all other obligations and liabilities of the Borrower (including,
without limitation, interest accruing at the then applicable rate provided in
the Credit Agreement after the maturity of the Loans and interest accruing at
the then applicable rate provided in the Credit Agreement after the filing of
any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrower, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding)
to (x) the Administrative Agent or any Lender (or, in the case of any
Bank-Provided Hedge or any Bank Provided Financial Service Product, any
Affiliate of any Lender), 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 Credit Agreement, this Agreement, the
other Loan Documents, any Bank-Provided Hedge, or any Bank Provided Financial
Service Product or any other document made, delivered or given by the Borrower
in connection with any of the foregoing, in each case whether on account of
principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses or otherwise (including, without limitation, all fees and
disbursements of counsel to the Administrative Agent or to the Lenders that are
required to be paid by the Borrower pursuant to the terms of any of the
foregoing agreements) and (y) B. & R. Machine & Tool
Corp., 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 B&R Promissory Note or any other document made,
delivered or given in connection therewith, in each case whether on account of
principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses or otherwise.

 

“Collateral”:  as defined in Section 3.

 

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

 

“Contingent
Borrower Obligations” means contingent indemnification obligations for
which no claims have been asserted.

 

“Copyrights”:  (i) all copyrights and works of
authorship arising under the laws of the United States, any other country or
any political subdivision thereof, whether registered or unregistered and
whether published or unpublished (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.

 

“Credit
Agreement”:  as defined in the introductory
paragraph.

 

“Foreign
Subsidiary”:  (a) any Subsidiary
organized under the laws of any jurisdiction outside the United States of
America. and (b) any Subsidiary of a Subsidiary described in clause (a).

 

“Foreign
Subsidiary Voting Stock”:  the voting
Capital Stock of any Foreign Subsidiary.

 

“Grantors”:  as defined in the introductory paragraph.

 

“Guarantor
Obligations”:  with respect to any
Guarantor, all obligations and liabilities of such Guarantor which may arise
under or in connection with this Agreement (including, without limitation, Section 2)
or any other Loan Document, any Bank-Provided Hedge or any Bank Provided 

 

4

 

Financial
Service Product to which such Guarantor is a party, in each case whether on
account of guarantee obligations, reimbursement obligations, fees, indemnities,
costs, expenses or otherwise (including, without limitation, all fees and
disbursements of counsel to the Administrative Agent or to the Lenders that are
required to be paid by such Guarantor pursuant to the terms of this Agreement
or any other Loan Document).

 

“Guarantors”:  the collective reference to each Grantor
other than the Borrower.

 

“Hedge
and Financial Service Obligations”: means obligations in respect of Bank-Provided
Hedges or Bank Provided Financial Service Products.

 

“Intellectual
Property”:  the collective reference
to (a) all rights, priorities and privileges relating to intellectual
property, arising under United States laws, including, without limitation, the
Copyrights, the Patents, the Trademarks, 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 (to the extent such Copyrights,
Patents, Trademarks and rights arise under United States law) (collectively,
the “U.S. Intellectual Property”) and (b) all rights, priorities
and privileges relating to intellectual property, arising under multinational
or foreign laws or otherwise (other than under United States law), including,
without limitation, the Copyrights, the Patents, the Trademarks, 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, other than
those described in clause (a) above (collectively, the “Foreign
Intellectual Property”).

 

“Intercompany
Note”:  any promissory note
evidencing loans made by any Grantor to the Borrower 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 (other than any Foreign Subsidiary Voting Stock excluded
from the definition of “Pledged Stock”) owned by a Grantor 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.

 

“Obligations”:  (i) in the case of the Borrower, the
Borrower Obligations, and (ii) in the case of each Guarantor, its
Guarantor Obligations.

 

“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,
including those listed on Schedule 6, and (iii) all reissues and
extensions thereof, all goodwill associated therewith, all divisions,
continuations and continuations-in-part of the foregoing.

 

“Permitted
Pari Passu Liens”:  as defined in Section 4.2.

 

“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 

 

5

 

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
directly owned by each Grantor, including the shares of Capital Stock listed on
Schedule 2, together with any shares of Capital Stock owned directly in
the future by any Grantor and any certificates representing such shares of
Capital Stock; provided that Pledged Stock shall not include (i) more
than 65% of the total outstanding Foreign Subsidiary Voting Stock of any
Foreign Subsidiary or more than 65% of any interest in a U.S.-Owned DRE, (ii) the
capital stock of Triumph Receivables, LLC or (iii) any equity or interests
in Triumph Group Charitable Foundation.

 

“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).

 

“Requirement
of Law”:  as to any Person, the
Certificate of Incorporation and By-Laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Official Body, in each case
applicable to or binding upon such Person or any of its property or to which
such Person or any of its property is subject.

 

“Revolving
Credit Obligations: as defined in the Intercreditor Agreement.

 

“Secured
Parties”:  the collective reference
to the Administrative Agent, the Lenders, any affiliate of any Lender to which
Borrower Obligations or Guarantor Obligations, as applicable, are owed and
B&R.

 

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

 

“Trademarks”:  (i) all trademarks, trade names,
corporate names, company names, business names, fictitious business names,
trade styles, service marks, trade dress, domain names, 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.

 

“Vehicles”:  all aircraft, aircraft engines and other
parts or components (but only to the extent that such aircraft, aircraft
engines and other parts or components (i) constitute Equipment of the
relevant Grantor (ii) do not constitute Inventory of the relevant Grantor
and otherwise are not held for sale in the ordinary course of business and (iii) are
covered by a certificate of title under federal law), boats, cars, trucks,
trailers, construction and earth moving equipment covered by a certificate of
title law of any state or a comparable federal law and all tires and other
appurtenances to any of the foregoing.

 

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 

 

6

 

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.           GUARANTEE

 

2.1           Guarantee.  (a)  Each of the Guarantors hereby,
jointly and severally, unconditionally and irrevocably, guarantees to the
Administrative Agent, for the ratable benefit of the Secured Parties and their
respective successors, indorsees, transferees and assigns, the prompt and
complete payment and performance by the Borrower when due (whether at the
stated maturity, by acceleration or otherwise) of the Borrower Obligations.

 

(b)           Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under
the other Loan Documents shall in no event exceed the amount which can be
guaranteed by such Guarantor under applicable federal and state laws relating
to the insolvency of debtors (after giving effect to the right of contribution
established in Section 2.2).

 

(c)           Each Guarantor agrees that the Borrower Obligations may at any time and
from time to time exceed the amount of the liability of such Guarantor
hereunder without impairing the guarantee contained in this Section 2 or
affecting the rights and remedies of the Administrative Agent or any Lender
hereunder.

 

(d)           The guarantee contained in this Section 2 shall remain in full force
and effect until all the Borrower Obligations and the obligations of each
Guarantor under the guarantee contained in this Section 2 shall have been
satisfied by payment in full, notwithstanding that from time to time during the
term of the Credit Agreement the Borrower may be free from any Borrower
Obligations.

 

(e)           No payment made by the Borrower, any of the Guarantors, any other
guarantor or any other Person or received or collected by the Administrative
Agent or any Lender from the Borrower, any of the Guarantors, any other
guarantor or any other Person by virtue of any action or proceeding or any
set-off or appropriation or application at any time or from time to time in
reduction of or in payment of the Borrower Obligations shall be deemed to
modify, reduce, release or otherwise affect the liability of any Guarantor
hereunder which shall, notwithstanding any such payment (other than any payment
made by such Guarantor in respect of the Borrower Obligations or any payment
received or collected from such Guarantor in respect of the Borrower
Obligations), remain liable for the Borrower Obligations up to the maximum
liability of such Guarantor hereunder until the Borrower Obligations are paid
in full.

 

2.2           Right of Contribution.  Each Guarantor hereby agrees that to the
extent that a Guarantor shall have paid more than its proportionate share of
any payment made hereunder, such Guarantor shall be entitled to seek and
receive contribution from and against any other Guarantor hereunder which has
not paid its proportionate share of such payment.  Each Guarantor’s right of contribution shall
be subject to the terms and conditions of Section 2.3.  The provisions of this Section 2.2 shall
in no respect limit the obligations and liabilities of any Guarantor to the
Administrative Agent and the Secured Parties, and each 

 

7

 

Guarantor
shall remain liable to the Administrative Agent and the Secured Parties for the
full amount guaranteed by such Guarantor hereunder.

 

2.3           No Subrogation.  Notwithstanding any payment made by any
Guarantor hereunder or any set-off or application of funds of any Guarantor by
the Administrative Agent or any Secured Party, no Guarantor shall be entitled
to be subrogated in whole or in part to any of the rights or claims of the
Administrative Agent or any Secured Party against the Borrower or any other
Guarantor or any collateral security or guarantee or right of offset held by
the Administrative Agent or any Secured Party for the payment of the Borrower
Obligations or any portion thereof, nor shall any Guarantor seek or be entitled
to seek any contribution or reimbursement from the Borrower or any other
Guarantor in respect of payments made by such Guarantor hereunder, until all
amounts owing to the Administrative Agent and the Secured Parties by the
Borrower on account of the Borrower Obligations are paid in full.  If any amount shall be paid to any Guarantor
on account of such subrogation rights at any time when all of the Borrower
Obligations shall not have been paid in full, such amount shall be held by such
Guarantor in trust for the Administrative Agent and the Secured Parties,
segregated from other funds of such Guarantor, and shall, forthwith upon
receipt by such Guarantor, be turned over to the Administrative Agent in the
exact form received by such Guarantor (with any necessary endorsement or
assignment), to be applied against the Borrower Obligations, whether matured or
unmatured, in accordance with the terms of the Loan Documents.

 

2.4           Amendments, etc. with respect to the
Borrower Obligations.  Each
Guarantor shall remain obligated hereunder notwithstanding that, without any
reservation of rights against any Guarantor and without notice to or further
assent by any Guarantor, (i) any demand for payment of any of the Borrower
Obligations made by the Administrative Agent or any Secured Party may be
rescinded by the Administrative Agent or such Secured Party and any of the
Borrower Obligations continued,  (ii) the
Borrower Obligations, or the liability of any other Person upon or for any part
thereof, or any collateral security or guarantee therefor or right of offset
with respect thereto, may, from time to time, in whole or in part, be renewed,
extended, amended, modified, accelerated, compromised, waived, surrendered or
released by the Administrative Agent or any Secured Party,  (iii) the Credit Agreement and the other
Loan Documents and any other documents executed and delivered in connection
therewith may be amended, modified, supplemented or terminated, in whole or in
part, from time to time, and (iv) any collateral security, guarantee or
right of offset at any time held by the Administrative Agent or any Secured
Party for the payment of the Borrower Obligations may be sold, exchanged,
waived, surrendered or released.  Neither
the Administrative Agent nor any Secured Party shall have any obligation to
protect, secure, perfect or insure any Lien (or any property subject thereto)
at any time held by it as security for the Borrower Obligations or for the
guarantee contained in this Section 2.

 

2.5           Guarantee Absolute and Unconditional.  Each Guarantor waives any and all notice of
the creation, renewal, extension or accrual of any of the Borrower Obligations
and notice of or proof of reliance by the Administrative Agent or any Secured
Party upon the guarantee contained in this Section 2 or acceptance of the
guarantee contained in this Section 2; the Borrower Obligations, and any
of them, shall conclusively be deemed to have been created, contracted or
incurred, or renewed, extended, amended or waived, in reliance upon the
guarantee contained in this Section 2; and all dealings between the
Borrower and any of the Guarantors, on the one hand, and the Administrative
Agent and the Secured Parties, on the other hand, likewise shall be
conclusively presumed to have been had or consummated in reliance upon the
guarantee contained in this Section 2. 
Each Guarantor waives diligence, presentment, protest, demand for
payment and notice of default or nonpayment to or upon the Borrower or any of
the Guarantors with respect to the Borrower Obligations.  Each Guarantor understands and agrees that
the guarantee contained in this Section 2 shall be construed as a
continuing, absolute and unconditional guarantee of payment without regard to (a) the
validity or enforceability of the Credit Agreement or any other Loan Document,
any of the Borrower Obligations or any other collateral security therefor or 

 

8

 

guarantee
or right of offset with respect thereto at any time or from time to time held
by the Administrative Agent or any Lender, (b) any defense, set-off or
counterclaim (other than a defense of payment or performance) which may at any
time be available to or be asserted by the Borrower or any other Person against
the Administrative Agent or any Secured Party, or (c) any other
circumstance whatsoever (with or without notice to or knowledge of the Borrower
or such Guarantor) which constitutes, or might be construed to constitute, an
equitable or legal discharge of the Borrower for the Borrower Obligations, or
of such Guarantor under the guarantee contained in this Section 2, in
bankruptcy or in any other instance. 
When making any demand hereunder or otherwise pursuing its rights and
remedies hereunder against any Guarantor, the Administrative Agent or any
Lender may, but shall be under no obligation to, make a similar demand on or
otherwise pursue such rights and remedies as it may have against the Borrower,
any other Guarantor or any other Person or against any collateral security or
guarantee for the Borrower Obligations or any right of offset with respect
thereto, and any failure by the Administrative Agent or any Lender to make any
such demand, to pursue such other rights or remedies or to collect any payments
from the Borrower, any other Guarantor or any other Person or to realize upon
any such collateral security or guarantee or to exercise any such right of
offset, or any release of the Borrower, any other Guarantor or any other Person
or any such collateral security, guarantee or right of offset, shall not
relieve any Guarantor of any obligation or liability hereunder, and shall not
impair or affect the rights and remedies, whether express, implied or available
as a matter of law, of the Administrative Agent or any Lender against any
Guarantor.  For the purposes hereof “demand”
shall include the commencement and continuance of any legal proceedings.

 

2.6           Reinstatement.  The guarantee contained in this Section 2
shall continue to be effective, or be reinstated, as the case may be, if at any
time payment, or any part thereof, of any of the Borrower Obligations is
rescinded or must otherwise be restored or returned by the Administrative Agent
or any Secured Party upon the insolvency, bankruptcy, dissolution, liquidation
or reorganization of the Borrower or any Guarantor, or upon or as a result of
the appointment of a receiver, intervenor or conservator of, or trustee or
similar officer for, the Borrower or any Guarantor or any substantial part of
its property, or otherwise, all as though such payments had not been made.

 

2.7           Payments.  Each Guarantor hereby guarantees that
payments hereunder will be paid to the Administrative Agent without set-off or
counterclaim in Dollars.

 

SECTION 3.           GRANT OF SECURITY INTEREST

 

Each
Grantor hereby assigns and transfers to the Administrative Agent, and hereby
grants to the Administrative Agent, for the ratable benefit of the Secured
Parties, 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 Obligations:

 

(a)           all Accounts;

 

(b)           all Chattel Paper (including, without limitation, Electronic Chattel
Paper);

 

(c)           all Contracts;

 

(d)           all Documents (other than title documents with respect to Vehicles);

 

(e)           all Equipment;

 

9

 

(f)            all Fixtures and other Goods;

 

(g)           all General Intangibles, including Payment Intangibles and Software;

 

(h)           all Instruments;

 

(i)            all U.S. Intellectual Property, all U.S. Intellectual Property
agreements, and all Foreign Intellectual Property for which filings or other
actions outside the United States are not required for perfection of the
security interest granted herein;

 

(j)            all Inventory;

 

(k)           all Investment Property;

 

(l)            all Letter-of-Credit Rights;

 

(m)          all Commercial Tort Claims described on Schedule 7;

 

(n)           all other personal property not otherwise described above (except for any
property specifically excluded from any clause in this section above, and any
property specifically excluded from any defined term used in any clause of this
section above);

 

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

 

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

 

provided, however, that notwithstanding any of the other
provisions set forth in this Section 3, this Agreement shall not
constitute a grant of a security interest in (i) any property to the
extent that such grant of a security interest is prohibited by any Requirements
of Law of an Official Body, requires a consent not obtained of any Official
Body pursuant to such Requirement of Law or is prohibited by, or constitutes a
breach or default under or results in the termination of or requires any
consent not obtained under, any contract, license, agreement, instrument or
other document evidencing or giving rise to such property or evidencing or
creating any purchase money lien or capital lease obligation regarding such
property permitted by the Credit Agreement or, in the case of any Investment
Property, Pledged Stock or Pledged Note (other than any of the foregoing issued
by a Grantor), any applicable shareholder or similar agreement, except to the
extent that such Requirement of Law or the term in such contract, license,
agreement, instrument or other document or shareholder or similar agreement
providing for such prohibition, breach, default or termination or requiring
such consent is ineffective under applicable law, (ii) Vehicles, (iii) any
leasehold interest in real property, (iv) cash, deposit accounts,
securities accounts and other similar accounts (excluding in all cases accounts
receivable), (v) any items specifically excluded from the definition of
Pledged Stock, (vi) any property or assets if the Administrative Agent
shall determine in its sole discretion that the cost to the Borrower or the
Guarantors of creating or perfecting such security interests in such property
or assets in favor of the Administrative Agent for the benefit of the Secured
Parties is excessive in relation to the benefits to be obtained therefrom by
the Secured Parties and (vii) any property specifically excluded from any
clause in this section above, and any property specifically excluded from any
defined term used in any clause of this section above.

 

10

 

SECTION 4.           REPRESENTATIONS AND WARRANTIES

 

To
induce the Administrative Agent and the Lenders to enter into the Credit Agreement
and to induce the Lenders to make their respective extensions of credit to the
Borrower thereunder, each Grantor hereby represents and warrants to the
Administrative Agent and each Lender that:

 

4.1           Title; No Other Liens.  Except for the security interest granted to
the Administrative Agent for the ratable benefit of the Secured Parties
pursuant to this Agreement or any other Loan Document and the other Liens
permitted to exist on the Collateral by the Credit Agreement, such Grantor owns
each item of the Collateral free and clear of any and all Liens or claims of
others.  For the avoidance of doubt, it
is understood and agreed that any Grantor may, as part of its business, grant
licenses in the ordinary course of business to third parties to use Intellectual
Property owned or developed by a Grantor. 
For purposes of this Agreement and the other Loan Documents, such
licensing activity shall not constitute a “Lien” on such Intellectual
Property.  Each of the Administrative
Agent and each Lender understands that any such licenses may be exclusive to
the applicable licensees, and such exclusivity provisions may limit the ability
of the Administrative Agent to utilize, sell, lease or transfer the related
Intellectual Property or otherwise realize value from such Intellectual
Property pursuant hereto.

 

4.2           Perfected First 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 Administrative Agent in completed and duly executed form)
will constitute valid perfected security interests in all of the Collateral
existing on the date hereof (or, as applicable, each other date that the
representation in this Section 4.2 is made) in which a security interest
may be perfected by the filings and other actions described on Schedule 3,
in favor of the Administrative Agent, for the ratable benefit of the Secured
Parties, as collateral security for such Grantor’s Obligations, enforceable in
accordance with the terms hereof and (b) are
prior to all other Liens on the Collateral in existence on the date hereof
except for (x) Liens permitted by the Credit Agreement and which have
priority over the Liens on the Collateral by operation of law and (y) Liens
securing the Revolving Credit Obligations which shall rank pari passu with the
Liens granted hereunder and shall be subject to the Intercreditor Agreement
(the “Permitted Pari Passu Liens”).

 

4.3           Jurisdiction of Organization; Chief Executive
Office.  On the date hereof, such
Grantor’s 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, as the case may be, are specified
on Schedule 4.  Such Grantor has
furnished to the Administrative Agent a certified charter, certificate of
incorporation or other organization document and long-form good standing
certificate as of a date which is recent to the date hereof (in each case to
the extent officials in the jurisdiction of organization provide such certified
documents or certificates).

 

4.4           Inventory and Equipment.  On the date hereof, the Inventory and the
Equipment held by any Grantor having an aggregate book value at any one
location in excess of $10,000,000 (other than mobile goods or any other
Inventory or Equipment in transit) 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 pledged
by such Grantor hereunder constitute all the issued and outstanding shares of
all classes of the Capital Stock of each Issuer of such Pledged Stock owned by
such Grantor; provided, with respect to Foreign Subsidiary Voting Stock,
if a Grantor owns more than 65% of the outstanding Foreign Subsidiary Voting
Stock of any 

 

11

 

relevant Issuer, the shares of Pledged Stock pledged by such Grantor
hereunder shall constitute 65% of the outstanding Foreign Subsidiary Voting
Stock of such relevant Issuer.

 

(b)           All the shares of the Pledged Stock (solely with respect to Pledged Stock
issued by a person that is not a Subsidiary of the Borrower or an Affiliate of
any such Subsidiary, to the best of each Grantor’s knowledge) have been duly
and validly issued and are fully paid and nonassessable (other than Pledged
Stock in limited liability companies and partnerships).

 

(c)           Each of the Pledged Notes (solely with respect to Pledged Notes issued by
a person that is not a Subsidiary of the Borrower or an Affiliate of any such
Subsidiary, to the best of each Grantor’s knowledge) 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.

 

(d)           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
security interest created by this Agreement, non-consensual Liens arising by
operation of law which are Permitted Liens and Permitted Pari Passu Liens.

 

4.7           [RESERVED].

 

4.8           [RESERVED].

 

4.9           Intellectual Property.  (a)  Schedule 6 lists all U.S.
Intellectual Property applications and registrations owned by such Grantor in
its own name on the date hereof and all agreements by which Grantor is the
exclusive licensee of any U.S. Intellectual Property applications and
registrations of a third party.

 

(b)           On the date hereof, all material U.S. Intellectual Property owned by
Grantor is valid, subsisting, unexpired and enforceable, and has not been
abandoned.  The conduct of such Grantor’s
business does not infringe or violate the Intellectual Property of any other
Person and is not being infringed on or violated by any other Person, except as
would not reasonably be expected to result in a Material Adverse Change.

 

(c)           Each Grantor owns, licenses or otherwise has the right to use all
Intellectual Property that is material to its business as currently conducted,
free of all Liens, except as would not reasonably be expected to result in a
Material Adverse Change.

 

(d)           No holding, decision or judgment has been rendered by any Official Body
against such Grantor’s Intellectual Property restricting the use of such
Intellectual Property by Grantor or that would impair the validity, ownership
or enforceability of such Intellectual Property in any respect that could
reasonably be expected to result in a Material Adverse Change.

 

(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, enforceability or use of any Intellectual Property or such
Grantor’s ownership interest therein, or (ii) which, if adversely
determined, would result in a Material Adverse Change on the value of any
Intellectual Property.

 

12

 

4.10         Commercial Tort Claims.  On the date hereof, except to the extent
listed on Schedule 7, no Grantor has rights in any Commercial Tort Claim
filed with any Official Body which could reasonably be expected to result in an
award of damages in excess of $1,000,000.

 

SECTION 5.           COVENANTS

 

Each
Grantor covenants and agrees with the Administrative Agent and the Lenders
that, from and after the date of this Agreement until the Loans and the other
Obligations (other than Hedge and Financial Service Obligations and Contingent
Borrower Obligations) shall have been paid in full:

 

5.1           Delivery of Instruments, Certificated
Securities and Chattel Paper.  If any amount payable to a Grantor under or
in connection with any of the Collateral shall be or become evidenced by any
Instrument (other than with respect to checks to be deposited), Certificated
Security or Chattel Paper in each case evidencing an amount in excess of
$1,000,000, such Grantor shall promptly notify the Administrative Agent thereof
and thereafter, at the request of the Administrative Agent, deliver such
Instrument, Certificated Security or Chattel Paper (other than electronic
chattel paper) to the Administrative Agent, duly indorsed in a manner
reasonably satisfactory to the Administrative Agent, to be held as Collateral
pursuant to this Agreement and shall take such other actions as the
Administrative Agent may request in accordance with Section 5.11 hereof.

 

5.2           [Reserved].

 

5.3           [Reserved]

 

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 described in Section 4.2
and shall defend such security interest against the claims and demands of all
Persons whomsoever, subject to the rights of such Grantor under the Loan
Documents to dispose of the Collateral, and other than claims and demands
permitted under any Loan Document (including Section 4.2).

 

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

 

(c)           At any time and from time to time, upon the written request of the
Administrative 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 Administrative
Agent may reasonably request for the purpose of obtaining or preserving the
full benefits of this Agreement and of the rights and powers herein granted,
including, without limitation, (i) filing any financing or continuation
statements under the Uniform Commercial Code (or other similar laws) in effect
in any jurisdiction with respect to the security interests created hereby and (ii) in
the case of Investment Property, Letter-of-Credit Rights and any other relevant
property constituting Collateral, taking any actions necessary to enable the
Administrative Agent to obtain “control” (within the meaning of the applicable
Uniform Commercial Code) with respect thereto.

 

5.5           Changes in Name, etc.  Such Grantor will not, except upon (a) 10
Business Days’ prior written notice of such change to the Administrative Agent
and (b) delivery to the Administrative Agent of all additional executed
financing statements and other documents reasonably requested by the 

 

13

 

Administrative
Agent to maintain the validity, perfection and priority of the security
interests provided for herein, (i) change its jurisdiction of organization
or the location of its chief executive office or sole place of business from
that referred to in Section 4.3 or (ii) change its legal name to the
extent that any financing statement filed in connection with this Agreement would
become misleading.

 

5.6           Notices.  Such Grantor will advise the Administrative
Agent and the Lenders promptly upon a responsible officer having actual
knowledge thereof, in reasonable detail, of:

 

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

 

(b)           the occurrence of any other event which could 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)  If such Grantor shall become
entitled to receive or shall receive any certificate (including, without
limitation, any certificate representing a dividend or a distribution in
connection with any reclassification, increase or reduction of capital or any
certificate issued in connection with any reorganization, or in connection with
a partial or total liquidation or dissolution) in respect of the Capital Stock,
or option or right to receive the same that constitutes, or would constitute
upon receipt, Pledged Stock, 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 Administrative Agent and the Lenders, hold the same in trust for the
Administrative Agent and the Lenders and deliver the same forthwith to the
Administrative Agent in the exact form received, duly indorsed by such Grantor
to the Administrative Agent, if required, together with an undated stock power
covering such certificate duly executed in blank by such Grantor and with, if
the Administrative Agent so requests, signature guaranteed, to be held by the
Administrative Agent, subject to the terms hereof, as additional collateral
security for the Obligations.

 

(b)           Without the prior written consent of the Administrative Agent, such
Grantor will not, except as permitted under the Credit Agreement (i) vote
to enable, or take any other action to permit, any Issuer to issue any Capital
Stock of any nature or to issue any other securities convertible into or
granting the right to purchase or exchange for any Capital Stock of any nature
of any Issuer, (ii) sell, assign, transfer, exchange, or otherwise dispose
of, or grant any option with respect to, the Investment Property, (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, or any interest therein
or (iv) enter into any agreement or undertaking after the date hereof
restricting the right or ability of such Grantor or the Administrative Agent to
sell, assign or transfer any of the Investment Property.

 

(c)           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 issued by it and will comply with such terms insofar as such terms are
applicable to it, (ii) it will notify the Administrative Agent promptly in
writing of the occurrence of any of the events described in Section 5.7(a) with
respect to the Investment Property 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 issued by it.

 

5.8           [RESERVED].

 

5.9           Intellectual Property.  (a)  Such Grantor (either itself or
through licensees) will, for each material U.S. and foreign Trademark necessary
to the normal conduct of such Grantor’s business (i) 

 

14

 

maintain
such Trademark in full force free from any adjudication of abandonment for
non-use, (ii) use such Trademark with the appropriate notice of
registration and all other notices and legends required by applicable
Requirements of Law, and (iii) not do any act or knowingly omit to do any
act whereby such Trademark is reasonably likely to 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 U.S. and foreign Patent necessary to
the normal conduct of such Grantor’s business may become prematurely forfeited,
abandoned or dedicated to the public.

 

(c)           Such Grantor (either itself or through licensees) will not, and will use
its commercially reasonable efforts to cause its licensees not to, do any act
or knowingly omit to do any act whereby any material portion of the
U.S. and foreign Copyrights necessary to the normal conduct of such Grantor’s
business may become invalidated, impaired, or fall into the public domain.

 

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

 

(e)           Such Grantor will notify the Administrative Agent promptly upon becoming
aware that any application or registration relating to any U.S. Intellectual
Property material to the normal conduct of such Grantor’s business may
imminently become forfeited, abandoned or dedicated to the public, or of any
materially adverse determination (including, without limitation, any
determination in any proceeding in the United States Patent and Trademark
Office or the United States Copyright Office) regarding such Grantor’s
ownership of, or the validity, enforceability or use of, any Intellectual
Property material to the normal conduct of such Grantor’s Business or such
Grantor’s right to register the same or to own and maintain the same.

 

(f)            Whenever such Grantor, either by itself or through any agent, employee,
licensee or designee, shall acquire, or file an application for the
registration of any Intellectual Property with the United States Patent and
Trademark Office or the United States Copyright Office, such Grantor shall
report such filing to the Administrative Agent within five Business Days after
the last day of the fiscal quarter in which such acquisition or filing
occurs.  Upon request of the
Administrative Agent, such Grantor shall execute and deliver, and have
recorded, any and all agreements, instruments, documents, and papers as the
Administrative Agent may reasonably request to evidence the Administrative
Agent’s security interest in any Copyright, Patent or Trademark and the
goodwill and general intangibles of such Grantor relating thereto or
represented thereby constituting Collateral pursuant to the terms of this
Agreement.

 

(g)           Such Grantor will take all reasonable steps, including, without
limitation, in any proceeding before the United States Patent and Trademark
Office or the United States Copyright Office, to maintain and pursue each
application (and to obtain the relevant registration) and to maintain each
registration of the Intellectual Property material to the normal conduct of
such Grantor’s business, including, without limitation, filing of applications
for renewal, affidavits of use and affidavits of incontestability.

 

(h)           In the event that any material U.S. Intellectual Property is infringed or
violated by a third party, and such Grantor has knowledge of such infringement
or violation, such Grantor shall exercise reasonable business judgment and (i) when
applicable and necessary in such Grantor’s reasonable judgment, 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, and the infringement or violation is
material, promptly notify the Administrative Agent after it learns thereof 

 

15

 

and if such Grantor deems it necessary in its
reasonable business judgment, promptly sue for infringement, misappropriation
or dilution, seek injunctive relief where appropriate and recover any and all
damages for such infringement or violation.

 

5.10         Commercial Tort Claims.  Such Grantor shall promptly, and in any event within ten Business Days
after any interest in the same is obtained by it, (a) notify the
Administrative Agent of any Commercial Tort Claim obtained by it which could
reasonably be expected to result in an award of damages in excess of $1,000,000
and (b) (i) grant to the Administrative Agent in writing a security
interest in any such Commercial Tort Claim and the proceeds thereof, all in
form and substance reasonably satisfactory to the Administrative Agent, (ii) supplement
Schedule 7 hereto, (iii) amend, update or file any existing or
additional financing statements and take all such other actions as are required
to perfect the Administrative Agent’s security interest in such Commercial Tort
Claims.

 

5.11         Further Actions of Grantors.  Each Grantor shall, from time to time, at its own expense, execute such
documents and certificates, file such financing statements, and do such other
acts and things as the Administrative Agent in its reasonable discretion may
deem necessary or advisable from time to time in order to preserve, perfect and
protect the Liens granted herein, with the priority contemplated hereby, and
the rights of the Administrative Agent to exercise and enforce its rights and
remedies hereunder with respect to the Collateral.

 

5.12         Compliance with Credit Agreement.  Each Grantor agrees that until such time as
the Loans and the other Obligations (other than Hedge and Financial Service
Obligations and Contingent Borrower Obligations) shall have been paid in full
and the this Agreement shall have terminated, it shall comply at all times with
the affirmative and negative covenants (the “Incorporated Covenants”)
set forth in Article 5 of the Credit Agreement (i) as if each of the
Incorporated Covenants was set forth in full in this Agreement and (ii) regardless
of any waivers of or amendments to any of the Incorporated Covenants, except
such waivers and amendments as are agreed to in writing by the Required Banks
(or such other number of Banks and/or other parties required pursuant to the
Credit Agreement to approve any such waiver or amendment). The definitions set
forth in the Credit Agreement shall apply mutatis mutandis in construing the
meanings of the Incorporated Covenants.

 

SECTION 6.           REMEDIAL PROVISIONS

 

6.1           Certain Matters Relating to Receivables.  (a) If required by the
Administrative Agent at any time after the occurrence and during the
continuance of an Event of Default, any payments of Receivables, when collected
by any Grantor, (i) shall be forthwith deposited by such Grantor in the
same form received, duly indorsed by such Grantor to the Administrative Agent
if reasonably required, in a Collateral Account maintained under the sole
dominion and control of the Administrative Agent, subject to withdrawal by the
Administrative Agent for the account of the Secured Parties only as provided in
Section 6.5, and (ii) until so turned over, shall be held by such
Grantor in trust for the Administrative Agent and the Secured Parties,
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.

 

(b)           At any time during the continuance of an Event of Default, at the
Administrative Agent’s request, each Grantor shall deliver to the
Administrative 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.

 

16

 

6.2           Communications with Obligors; Grantors Remain
Liable.  (a)  The Administrative
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 to verify with them to the Administrative Agent’s
satisfaction the existence, amount and terms of any Receivables.

 

(b)           Upon the request of the Administrative Agent at any time after the
occurrence and during the continuance of an Event of Default, each Grantor
shall notify obligors on the Receivables that the Receivables have been
assigned to the Administrative Agent for the ratable benefit of the Secured
Parties and that payments in respect thereof shall be made directly to the
Administrative Agent.

 

(c)           Anything herein to the contrary notwithstanding, each Grantor shall
remain liable under each of the Receivables 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 Administrative Agent nor any
Lender shall have any obligation or liability under any Receivable (or any
agreement giving rise thereto) by reason of or arising out of this Agreement or
the receipt by the Administrative Agent or any Lender of any payment relating
thereto, nor shall the Administrative Agent or any Lender 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), 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.

 

6.3           Pledged Stock.  (a)  Unless an Event of Default shall
have occurred and be continuing and the Administrative Agent shall have given
notice to the relevant Grantor of the Administrative 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
and all payments made in respect of the Pledged Notes, to the extent permitted
in the Credit Agreement, and to exercise all voting and corporate or other
organizational rights inuring to the owner of the Investment Property; provided,
however, that no vote shall be cast or other right exercised which would
materially and adversely impair the Collateral (other than in connection with a
transaction permitted under the Credit Agreement or other Loan Documents) or
which would be inconsistent with or result in any violation of any provision of
the Credit Agreement or the other Loan Documents.

 

(b)           If an Event of Default shall occur and be continuing and the
Administrative Agent shall give notice of its intent to exercise such rights to
the relevant Grantor or Grantors, (i) the Administrative Agent shall have
the right to receive any and all cash dividends, payments or other Proceeds
paid in respect of the Investment Property and make application thereof to the
Obligations in accordance with the Credit Agreement and (ii) any or all of
the Investment Property shall be registered in the name of the Administrative
Agent or its nominee, and the Administrative 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 the
Investment Property upon the merger, consolidation, reorganization,
recapitalization or other fundamental change in the corporate or other
organizational structure of any Issuer, or upon the exercise by any Grantor or
the Administrative 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 the Investment Property with any committee, depositary,
transfer agent, registrar or other designated agency upon such terms and
conditions as the Administrative Agent may determine), all without liability
except to account for property actually received by it, but the Administrative
Agent shall 

 

17

 

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)           Each Grantor hereby authorizes and instructs each Issuer of any
Investment Property pledged by such Grantor hereunder to comply with any
instruction received by it from the Administrative Agent in writing (including
with respect to the payment of dividends or other payments with respect to the
Investment Property) 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; provided the Administrative Agent agrees not to give any such
instruction referenced in this clause (c) unless an Event of Default shall
be continuing.

 

6.4           Proceeds to be Turned Over To Administrative
Agent.  In addition to the rights of
the Administrative Agent and the Secured Parties specified in Section 6.1
with respect to payments of Receivables, if an Event of Default shall occur and
be continuing, all Proceeds received by any Grantor consisting of cash, checks
and other near-cash items shall be held by such Grantor in trust for the
Administrative Agent and the Lenders, segregated from other funds of such
Grantor, and shall, forthwith upon receipt by such Grantor, be turned over to
the Administrative Agent in the same form received by such Grantor (duly
indorsed by such Grantor as reasonably requested by the Administrative Agent).  All Proceeds received by the Administrative
Agent hereunder shall be held by the Administrative Agent in a Collateral
Account maintained under its sole dominion and control.  All Proceeds while held by the Administrative
Agent in a Collateral Account (or by such Grantor in trust for the
Administrative Agent and the Secured Parties) shall continue to be held as
collateral security for all the Obligations and shall not constitute payment
thereof until applied as provided in Section 6.5.  At any time that no Event of Default shall be
continuing, the Grantors may request that, and promptly upon receipt of such
notice, the Administrative Agent shall direct that, the proceeds being held in
any Collateral Account (or by such Grantor in trust for the Administrative Agent)
be released therefrom and redirected to Borrower or the other Grantors, as
applicable.

 

6.5           Application of Proceeds.  During the continuance of an Event of
Default, the Administrative Agent may apply all or any part of Proceeds
constituting Collateral (subject to the terms of the Intercreditor Agreement),
whether or not held in any Collateral Account, and any proceeds of the
guarantee set forth in Section 2, in payment of the Obligations in the
following order:

 

First, to pay incurred and unpaid fees and expenses of
the Administrative Agent under the Loan Documents;

 

Second, to the Administrative Agent, for application by it
towards payment of amounts then due and owing and remaining unpaid in respect
of the Obligations, pro  rata among the Secured Parties according
to the amounts of the Obligations then due and owing and remaining unpaid to
the Secured Parties;

 

Third, to the Administrative Agent, for application by it
towards prepayment of the Obligations, pro  rata among the Secured
Parties according to the amounts of the Obligations then held by the Secured
Parties; and

 

Fourth, any balance remaining after the Obligations shall
have been paid in full shall be paid over to the Borrower or to whomsoever may
be lawfully entitled to receive the same.

 

6.6           Code and Other Remedies.  If an Event of Default shall occur and be
continuing, the Administrative Agent, on behalf of the Secured Parties, may
exercise, in addition to all other rights and 

 

18

 

remedies
granted to them in this Agreement and in any other instrument or agreement
securing, evidencing or relating to the Obligations, all rights and remedies of
a secured party under the New York UCC or any other applicable law.  Without limiting the generality of the
foregoing, the Administrative Agent, without demand of performance or other
demand, presentment, protest, advertisement or notice of any kind (except any
notice required by law referred to below) to or upon any Grantor or any other
Person (all and each of which demands, defenses, advertisements and notices are
hereby waived), may in such circumstances forthwith collect, receive,
appropriate and realize upon 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 Administrative Agent or
any Lender or elsewhere upon such terms and conditions as it may deem advisable
and at such prices as it may deem best, for cash or on credit or for future
delivery without assumption of any credit risk. 
The Administrative Agent or any Secured Party 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, at the Administrative Agent’s request, to
assemble the Collateral and make it available to the Administrative Agent at
places which the Administrative Agent shall reasonably select, whether at such
Grantor’s premises or elsewhere.  The
Administrative Agent shall apply the net proceeds of any action taken by it
pursuant to this Section 6.6, after deducting all reasonable costs and
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 Administrative Agent and the Secured Parties
hereunder, including, without limitation, reasonable attorneys’ fees and
disbursements, to the payment in whole or in part of the Obligations, as set
forth in Section 6.5 above, and only after such application and after the
payment by the Administrative 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 Administrative Agent account for the surplus, if
any, to any Grantor.  To the extent
permitted by applicable law, each Grantor waives all claims, damages and
demands it may acquire against the Administrative Agent or any Secured Party
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) Each Grantor recognizes that the
Administrative Agent may be unable to effect a public sale of any or all the
Pledged Stock, 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 Administrative Agent shall be under no obligation to delay a sale of
any of the Pledged Stock for the period of time necessary to permit the Issuer
thereof to register such securities for public sale under the Securities Act,
or under applicable state securities laws, even if such Issuer would agree to
do so.

 

(b)           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 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 Administrative Agent and the Lenders, that the
Administrative Agent and the Lenders have no adequate remedy at law in respect
of such breach and, as a consequence, that each and

 

19

 

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 Credit Agreement.

 

6.8           Subordination.  Each Grantor hereby agrees that, upon the
occurrence and during the continuance of an Event of Default, unless otherwise
agreed by the Administrative Agent, all Indebtedness owing by it to any
Subsidiary of the Borrower shall be fully subordinated to the indefeasible
payment in full in cash of such Grantor’s Obligations.

 

6.9           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 Obligations and the fees and disbursements of any
attorneys employed by the Administrative Agent or any Lender to collect such
deficiency.

 

SECTION 7.           THE ADMINISTRATIVE AGENT

 

7.1           Administrative Agent’s Appointment as
Attorney-in-Fact, etc.  (a)  Each Grantor hereby irrevocably
constitutes and appoints the Administrative Agent and any officer or agent
thereof, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the place and
stead of such Grantor and in the name of such Grantor or in its own name, for
the purpose of carrying out the terms of this Agreement, to take any 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 Administrative 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)            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 with
respect to any other Collateral and file any claim or take any other action or
proceeding in any court of law or equity or otherwise deemed appropriate by the
Administrative Agent for the purpose of collecting any and all such moneys due
under any Receivable or with respect to any other Collateral whenever payable;

 

(ii)           in the case of any Intellectual Property owned by the Grantors, execute
and deliver, and have recorded, any and all agreements, instruments, documents
and papers as the Administrative Agent may request to evidence the
Administrative Agent’s and the Secured Parties’ security interest in such
Intellectual Property and the goodwill and general intangibles of such Grantor
relating thereto or represented thereby;

 

(iii)          pay or discharge taxes and Liens levied or placed on or threatened
against the Collateral, effect any 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 necessary or appropriate to evidence
such sale; and

 

(v)           (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 Administrative Agent or as the 

 

20

 

Administrative
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 Administrative Agent may deem appropriate; (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 Administrative Agent
shall in its sole discretion determine; 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 Administrative Agent were the
absolute owner thereof for all purposes, and do, at the Administrative Agent’s
option and such Grantor’s expense, at any time, or from time to time, all acts
and things which the Administrative Agent deems necessary to protect, preserve
or realize upon the Collateral and the Administrative Agent’s and the Secured
Parties’ security interests therein and to effect the intent of this Agreement,
all as fully and effectively as such Grantor might do.

 

Anything
in this Section 7.1(a)  to the contrary notwithstanding, the
Administrative 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 Administrative 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 Administrative Agent incurred in connection with
actions undertaken as provided in this Section 7.1, together with interest
thereon at a rate per annum equal to the highest rate per annum at which
interest would then be payable on any category of past due ABR Loans under the
Credit Agreement, from the date of payment by the Administrative Agent to the
date reimbursed by the relevant Grantor, shall be payable by such Grantor to
the Administrative Agent on demand.

 

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

 

7.2           Duty of Administrative Agent.  The Administrative Agent’s sole duty 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 Administrative Agent deals
with similar property for its own account. 
Neither the Administrative Agent, any Secured Party nor any of their
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 Grantor or any other Person or to take any
other action whatsoever with regard to the Collateral or any part thereof.  The powers conferred on the Administrative
Agent and the Secured Parties hereunder are solely to protect the
Administrative Agent’s and the Secured Parties’ interests in the Collateral and
shall not impose any duty upon the Administrative Agent or any Secured Party to
exercise any such powers.  The
Administrative Agent and 

 

21

 

the
Secured Parties shall be accountable only for amounts that they actually
receive as a result of the exercise of such powers, and neither they nor any of
their officers, directors, employees or agents shall be responsible to any
Grantor for any act or failure to act hereunder, except for their own gross
negligence or willful misconduct.

 

7.3           Execution of Financing Statements.  Pursuant to any applicable law, each Grantor
authorizes the Administrative 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 Administrative Agent determines appropriate to perfect the
security interests of the Administrative Agent under this Agreement.  Each Grantor authorizes the Administrative
Agent to use the collateral description “all personal property” in any such
financing statements.  Each Grantor
hereby ratifies and authorizes the filing by the Administrative Agent of any
financing statement with respect to the Collateral made prior to the date
hereof.

 

7.4           Authority of Administrative Agent.  Each Grantor acknowledges that the rights and
responsibilities of the Administrative Agent under this Agreement with respect
to any action taken by the Administrative Agent or the exercise or non-exercise
by the Administrative 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 between the Administrative Agent and the Secured Parties,
be governed by the Credit Agreement and by such other agreements with respect
thereto as may exist from time to time among them, but, as between the
Administrative Agent and the Grantors, the Administrative Agent shall be
conclusively presumed to be acting as agent for the Secured Parties 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 Section 8.1 (Amendments and Waivers) of the Credit
Agreement.

 

8.2           Notices.  All notices, requests and demands to or upon
the Administrative Agent or any Grantor hereunder shall be effected in the
manner provided for in Section 8.2 (Notices) of the Credit Agreement;
provided that any such notice, request or demand to or upon any Guarantor shall
be addressed to such Guarantor at its notice address set forth on Schedule 1.

 

8.3           No Waiver by Course of Conduct; Cumulative
Remedies.  Neither the
Administrative Agent nor any Lender 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
Administrative Agent or any Lender, any right, power or privilege hereunder
shall operate as a waiver thereof.  No
single or partial exercise of any right, power or privilege hereunder shall
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege.  A waiver by
the Administrative Agent or any Lender of any right or remedy hereunder on any
one occasion shall not be construed as a bar to any right or remedy which the
Administrative Agent or such Lender 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           Enforcement Expenses; Indemnification.  Each Grantor shall comply with Section 8.5
(Expenses) of the Credit Agreement with regard to the costs and expenses
incurred in connection with the 

 

22

 

guarantee contained in Section 2 or otherwise
enforcing or preserving any rights under this Agreement.  The agreements in this Section 8.4 shall
survive repayment of the Obligations and all other amounts payable under the Credit
Agreement and the other Loan Documents.

 

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
Administrative Agent and the Lenders 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
Administrative Agent.

 

8.6           Set-Off.  In addition to any rights and remedies of the
Lenders provided by law, each Lender shall have the right, without notice to
any Grantor, any such notice being expressly waived by each Grantor to the
extent permitted by applicable law, upon any Obligations becoming due and
payable by any Grantor (whether at the stated maturity, by acceleration or
otherwise), to apply to the payment of such Obligations, by setoff or
otherwise, 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 such Lender, any
affiliate thereof or any of their respective branches or agencies to or for the
credit or the account of such Grantor. 
Each Lender agrees promptly to notify the relevant Grantor and the
Administrative Agent after any such application made by such Lender, provided
that the failure to give such notice shall not affect the validity of such
application.

 

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 email or 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 Loan Documents
represent the agreement of the Grantors, the Administrative Agent and the
Secured Parties with respect to the subject matter hereof and thereof, and
there are no promises, undertakings, representations or warranties by the
Administrative Agent or any Secured Party relative to subject matter hereof and
thereof not expressly set forth or referred to herein or in the other Loan
Documents.

 

8.11        GOVERNING
LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

8.12         Submission To Jurisdiction; Waivers.  Each Grantor hereby irrevocably and
unconditionally:

 

(a)           submits for itself and its property in any legal action or proceeding
relating to this Agreement and the other Loan Documents to which it is a party,
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 

 

23

 

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 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 Grantor at its
address referred to in Section 8.2 or at such other address of which the
Administrative Agent shall have been notified 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.

 

8.13         Acknowledgements.  Each Grantor hereby acknowledges that:

 

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

 

(b)           neither the Administrative Agent nor any Secured Party has any fiduciary
relationship with or duty to any Grantor arising out of or in connection with
this Agreement or any of the other Loan Documents, and the relationship between
the Grantors, on the one hand, and the Administrative Agent and Secured
Parties, 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 Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Secured Parties or among the Grantors and the Secured Parties.

 

8.14         Additional Grantors.  Each Subsidiary of the Borrower that is
required to become a party to this Agreement pursuant to Section 5.1.15
(Collateral and Additional Collateral; Execution and Delivery of Additional
Collateral Documents) of the Credit Agreement 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.

 

8.15         Releases.  (a)  At such time as the Loans and the
other Obligations (other than Hedge and Financial Service Obligations and
Contingent Borrower 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 Administrative 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 described herein shall revert to the
Grantors.  At the request and sole
expense of any Grantor following any such termination, the Administrative Agent
shall deliver to such Grantor any Collateral held by the Administrative Agent
hereunder, and execute and deliver to such Grantor such documents as such
Grantor shall reasonably request to evidence such termination.

 

24

 

(b)           If any of the Collateral shall be sold, transferred or otherwise disposed
of by any Grantor in a transaction permitted by the Credit Agreement, then such
Collateral shall automatically be released from the Liens created hereby, all
without delivery of any instrument or performance of any act by any party.  At the reasonable request and sole expense of
such Grantor, the Administrative Agent shall execute and deliver to such
Grantor all reasonable releases or other documents reasonably necessary or
desirable to evidence such release of the Liens created hereby on such
Collateral.  At the request and sole
expense of the Borrower, a Guarantor shall be released from its obligations
hereunder in the event that all the Capital Stock of such Guarantor shall be
sold, transferred or otherwise disposed of or such Guarantor is otherwise no
longer required to be a Guarantor pursuant to the Credit Agreement, in each
case, in a transaction or other circumstance permitted by the Credit Agreement;
provided that the Borrower shall have delivered to the Administrative
Agent, a written notice identifying the relevant Guarantor and the terms of the
sale or other disposition giving rise to such release in reasonable detail,
together with a certification by the Borrower stating that such transaction is
in compliance with the Credit Agreement and the other Loan Documents.

 

8.16        WAIVER
OF JURY TRIAL.  EACH GRANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

8.17         Intercreditor Agreement.  Notwithstanding
anything herein to the contrary, the liens and security interests granted to
the Administrative Agent for the
ratable benefit of the Secured Parties pursuant to this Agreement or any other Loan Document and the exercise of any right or
remedy by the Administrative Agent
or any Secured Party hereunder is 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 and
control with respect to any right or remedy. 
Without limiting the generality of the foregoing, and notwithstanding
anything herein to the contrary, all rights and remedies of the Administrative Agent (and the Secured Parties) shall be subject to the terms of the
Intercreditor Agreement, and until the Revolving Credit Obligations are “paid in full” (as defined in the Intercreditor
Agreement), any obligation of any Grantor
hereunder or under the Credit Agreement with respect to the delivery or control
of any Collateral, the novation of any lien on any certificate of title, bill
of lading or other document, the giving of any notice to any bailee or other
Person, the provision of voting rights or the obtaining of any consent of any
Person, in each case, with respect to the Collateral, shall be deemed to be satisfied if the Grantor complies
with the requirements of the similar provision of the applicable Revolving
Credit Document (as defined in the
Intercreditor Agreement).

 

25

 

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

 

 

	
   

  	
  TRIUMPH
  GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  M. David Kornblatt

  
	
   

  	
   

  	
   

  	
  Name:
  M. David Kornblatt

  
	
   

  	
   

  	
   

  	
  Title:
  Executive Vice President, Chief Financial Officer and Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
  NU-TECH
  BRANDS, INC.

  
	
   

  	
  TRIUMPH
  BRANDS, INC.

  
	
   

  	
  TRIUMPH
  GROUP ACQUISITION CORP.

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  M. David Kornblatt

  
	
   

  	
   

  	
   

  	
  Name:
  M. David Kornblatt

  
	
   

  	
   

  	
   

  	
  Title:
  President and Treasurer of each of the above named companies

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  KILROY
  STEEL, INC.

  
	
   

  	
  KILROY
  STRUCTURAL STEEL CO.

  
	
   

  	
  TRIUMPH
  METALS COMPANY

  
	
   

  	
  TRIUMPH
  STRUCTURES - EAST TEXAS, INC.

  
	
   

  	
  TRIUMPH
  PRECISION, INC.

  
	
   

  	
  TRIUMPH
  INSULATION SYSTEMS, LLC

  
	
   

  	
  THE
  MEXMIL HOLDING COMPANY, LLC

  
	
   

  	
  TRIUMPH
  STRUCTURES - LONG ISLAND, LLC

  
	
   

  	
  TRIUMPH
  INVESTMENT HOLDINGS, INC.

  
	
   

  	
  TRIUMPH
  INSTRUMENTS - BURBANK, INC.

  
	
   

  	
  AIRFRAME
  SPARES AND LOGISTICS, LLC

  
	
   

  	
  MEXMIL
  CHINA, LLC

  
	
   

  	
  TRIUMPH
  GROUP HOLDINGS - MEXICO, LLC

  
	
   

  	
  TRIUMPH
  GROUP INVESTMENT - MEXICO, LLC

  
	
   

  	
  TRIUMPH
  AEROSPACE SYSTEMS - NEWPORT NEWS, INC.

  
	
   

  	
  TRIUMPH
  ACCESSORY SERVICES - GRAND PRAIRIE, INC.

  
	
   

  	
  TRIUMPH
  FABRICATIONS - FORT WORTH, INC.

  
	
   

  	
  CBA
  ACQUISITION, LLC

  
	
   

  	
  TRIUMPH
  FABRICATIONS - HOT SPRINGS, INC.

  
	
   

  	
  TRIUMPH
  PROCESSING, INC.

  
	
   

  	
  TRIUMPH
  ACTUATION SYSTEMS - VALENCIA, INC.

  
	
   

  	
  TRIUMPH
  ACTUATION SYSTEMS, LLC

  
	
   

  	
  TRIUMPH
  ACTUATION SYSTEMS - CONNECTICUT, LLC

  
	
   

  	
  HT
  PARTS, L.L.C.

  
	
   

  	
  LAMAR
  ELECTRO-AIR CORPORATION

  
	
   

  	
  TRIUMPH
  AEROSPACE SYSTEMS - WICHITA, INC.

  
	
   

  	
  TRIUMPH
  STRUCTURES - KANSAS CITY, INC.

  
	
   

  	
  THE
  TRIUMPH GROUP OPERATIONS, INC.

  

 

26

 

	
   

  	
  TRIUMPH
  AEROSPACE SYSTEMS GROUP, INC.

  
	
   

  	
  TRIUMPH
  AFTERMARKET SERVICES GROUP, INC.

  
	
   

  	
  TRIUMPH
  AIRBORNE STRUCTURES, INC.

  
	
   

  	
  TRIUMPH
  AVIATIONS INC.

  
	
   

  	
  TRIUMPH
  FABRICATIONS - SAN DIEGO, INC.

  
	
   

  	
  TRIUMPH
  COMPOSITE SYSTEMS, INC.

  
	
   

  	
  TRIUMPH
  CONTROLS, LLC

  
	
   

  	
  TRIUMPH
  ENGINEERED SOLUTIONS, INC.

  
	
   

  	
  TRIUMPH
  ENGINEERING SERVICES, INC.

  
	
   

  	
  TRIUMPH
  GEAR SYSTEMS, INC.

  
	
   

  	
  TRIUMPH
  GEAR SYSTEMS - MACOMB, INC.

  
	
   

  	
  TRIUMPH
  GROUP ACQUISITION HOLDINGS, INC.

  
	
   

  	
  TRIUMPH
  INSTRUMENTS, INC.

  
	
   

  	
  TRIUMPH
  PRECISION CASTINGS CO.

  
	
   

  	
  TRIUMPH
  STRUCTURES - LOS ANGELES, INC.

  
	
   

  	
  TRIUMPH
  THERMAL SYSTEMS, INC.

  
	
   

  	
  TRIUMPH
  TURBINE SERVICES, INC.

  
	
   

  	
  TRIUMPH
  STRUCTURES - WICHITA, INC.

  
	
   

  	
  TRIUMPH
  INTERIORS, LLC

  
	
   

  	
  TRIUMPH
  FABRICATIONS — ORANGEBURG, INC.

  
	
   

  	
  TRIUMPH
  FABRICATIONS — ST. LOUIS, INC.

  
	
   

  	
  TRIUMPH
  REAL ESTATE — MEXICO, LLC

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  M. David Kornblatt

  
	
   

  	
   

  	
   

  	
  Name:
  M. David Kornblatt

  
	
   

  	
   

  	
   

  	
  Title:
  Vice President and Treasurer of each of the above named companies

  
	
   

  	
   

  	
   

  
	
   

  	
  TRIUMPH
  AEROSTRUCTURES, LLC

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Richard C. Ill

  
	
   

  	
   

  	
   

  	
  Name:  Richard C. Ill

  
	
   

  	
   

  	
   

  	
  Title:  Chairman

  
	
   

  	
   

  	
   

  
	
   

  	
  VAC INDUSTRIES, INC.

  
	
   

  	
  VOUGHT COMMERCIAL AIRCRAFT COMPANY

  
	
   

  	
  CONTOUR AEROSPACE CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  M. David Kornblatt

  
	
   

  	
   

  	
   

  	
  Name:
  M. David Kornblatt

  
	
   

  	
   

  	
   

  	
  Title:  Vice President and Treasurer

  

 

27

 

ACKNOWLEDGEMENT AND CONSENT***

 

The
undersigned hereby acknowledges receipt of a copy of the Guarantee and
Collateral Agreement dated as of June 16, 2010 (the “Agreement”),
made by the Grantors parties thereto for the benefit of Royal Bank of Canada,
as Administrative Agent.  The undersigned
agrees for the benefit of the Administrative Agent and the Secured Parties as
follows:

 

1.     The undersigned will be
bound by the terms of the Agreement and will comply with such terms insofar as
such terms are applicable to the undersigned.

 

2.     The undersigned will notify
the Administrative Agent promptly in writing of the occurrence of any of the
events described in Section 5.7(a) of the Agreement.

 

3.     The terms of Sections 6.3(c) and
6.7 of the Agreement 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 of the Agreement.

 

 

	
   

  	
  [NAME
  OF ISSUER]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Address
  for Notices:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Fax:

  

 

 

***         This
consent is necessary only with respect to any Issuer which is not also a
Grantor.

 

28

 

Annex 1 to

Guarantee and Collateral Agreement

 

ASSUMPTION
AGREEMENT, dated as of                         ,
201  , made by                                                 
(the “Additional Grantor”), in favor of Royal Bank of Canada, as
administrative agent (in such capacity, the “Administrative Agent”) for
the banks and other financial institutions or entities (the “Lenders”)
parties to the Credit Agreement referred to below.  All capitalized terms not defined herein
shall have the meaning ascribed to them in such Credit Agreement.

 

W I T N E S S E T H :

 

WHEREAS,
Triumph Group, Inc. (the “Borrower”), the Lenders and the
Administrative Agent have entered into a Credit Agreement, dated as of June 16,
2010 (as amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”);

 

WHEREAS,
in connection with the Credit Agreement, the Borrower and certain of its
Affiliates (other than the Additional Grantor) have entered into the Guarantee
and Collateral Agreement, dated as of June 16, 2010 (as amended,
supplemented or otherwise modified from time to time, the “Guarantee and
Collateral Agreement”) in favor of the Administrative Agent for the ratable
benefit of the Secured Parties;

 

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

 

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

 

NOW,
THEREFORE, IT IS AGREED:

 

1.  Guarantee and Collateral Agreement.  By executing and delivering this Assumption
Agreement, the Additional Grantor, as provided in Section 8.14 of the
Guarantee and Collateral Agreement, hereby becomes a party to the Guarantee and
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 Guarantee and Collateral Agreement.  The Additional Grantor hereby represents and
warrants that each of the representations and warranties contained in Section 4
of the Guarantee and 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.

 

2.  Governing
Law.  THIS ASSUMPTION AGREEMENT SHALL
BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF
THE STATE OF NEW YORK.

 

1

 

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:

  

 

2

 

Annex 1-A to

Assumption Agreement

 

Supplement to Schedule 1

 

Supplement to Schedule 2

 

Supplement to Schedule 3

 

Supplement to Schedule 4

 

Supplement to Schedule 5

 

Supplement to Schedule 6

 

Supplement to Schedule 7

 

iExhibit 10.8

 

Employment Agreement

 

This
Employment Agreement (the “Agreement”) dated as of March 29, 2006
(the “Effective Date”), is made by and between Vought Aircraft
Industries, Inc., a Delaware corporation, (together with any successor
thereto, the “Company”) and Elmer Doty (the “Executive”).

 

RECITALS

 

A.            It is the desire of the
Company to assure itself of the services of the Executive by entering into this
Agreement.

 

B.            The Executive and the
Company mutually desire that Executive provide services to the Company on the
terms herein provided.

 

AGREEMENT

 

NOW,
THEREFORE, in consideration of the foregoing and of the respective covenants
and agreements set forth below the parties hereto agree as follows:

 

1.                                      Employment.

 

(a)                                  General.  The
Company shall employ the Executive and the Executive shall enter the employ of
the Company, for the period set forth in Section 1(b), in the
position set forth in Section 1(c), and upon the other terms and
conditions herein provided.

 

(b)                                 Employment Term.  The
initial term of employment under this Agreement (the “Initial Term”)
shall be for the period beginning on the Effective Date and ending at the end
of the day on December 31, 2006, unless earlier terminated as provided in Section 3.  The employment term hereunder shall
automatically be extended for successive one-year periods (“Extension Terms”
and, collectively with the Initial Term, the “Term”) unless either party
gives notice of non-extension to the other no later than ninety (90) days prior
to the expiration of the then-applicable Term and subject to earlier
termination as provided in Section 3.

 

(c)                                  Position and Duties.  The
Executive shall serve as the Chief Executive Officer of the Company with such
customary responsibilities, duties and authority as may from time to time be
assigned to the Executive by the Board of Directors of the Company (the “Board”).  The Executive shall devote substantially all
his working time and efforts to the business and affairs of the Company (which
may include service to its Affiliates). 
The Executive agrees to observe and comply with the rules and
policies of the Company as adopted by the Company from time to time. During the
Term, it shall not be a violation of this Agreement for the Executive to (i) serve
on industry trade, civic or charitable boards or committees; (ii) deliver

 

 

lectures or fulfill speaking engagements; (iii) manage
his personal investments and affairs; and (iv) serve on the board of
directors of for-profit enterprises with the Board’s prior consent, as long as
such activities do not materially interfere with the performance of the
Executive’s duties and responsibilities as an employee of the Company.  During his employment and for the 12-month
period following termination of his employment with the Company, (x) the
Executive agrees not to disparage in any material respect the Company, any of
its products or practices, or any of its directors, officers, agents,
representatives, stockholders or Affiliates, either orally or in writing, and (y) the
Company agrees not to disparage in any material respect the Executive.

 

2.                                      Compensation and Related Matters.

 

(a)                                  Annual Base Salary. 
During the Term, the Executive shall receive a base salary at a rate of
$500,000 per annum (the “Annual Base Salary”), which shall be paid in
accordance with the customary payroll practices of the Company, subject to
adjustment as determined by the Board.

 

(b)                                 Annual Bonus.  During the
Term, the Executive will be eligible to receive annual bonuses based upon
achieving annual financial plan and organization metrics to be determined by
the Board (or its committee), with a maximum bonus opportunity for calendar
year 2006 equal to 150% of Annual Base Salary. 
Notwithstanding the foregoing, the Executive will receive a bonus for
calendar year 2006 that is at least equal to $500,000, provided, that the
Executive’s employment has not been terminated for Cause pursuant to Section 3(a)(iii),
due to Disability pursuant to Section 3(a)(ii), due to death or without
Good Reason pursuant to Section 3(a)(vi) on or before December 31,
2006.

 

(c)                                  Relocation Bonuses.  In
addition to the annual bonus opportunity, the Executive will receive three
relocation bonuses if the Executive’s employment has not been terminated for
Cause pursuant to Section 3(a)(iii), due to Disability pursuant to Section 3(a)(ii),
due to death or without Good Reason pursuant to Section 3(a)(vi) prior
to the applicable bonus date, as follows: 
(i) $175,000 on the Effective Date, (ii) $175,000 on June 30,
2006, and (iii) $100,000 on December 31, 2006.

 

(d)                                 Stock Options.  Unless
mutually agreed to otherwise by the Company and the Executive, the Executive
will receive an option to purchase 250,000 shares of common stock of the
Company with a per share exercise price of $10.00 (the “Option”).  Twenty-five percent (25%) of the Option will
vest based on the passage of time with 6.25% of the Option vesting on each of
the first four anniversaries of the Effective Date, subject to the Executive’s
continued employment with the Company on the applicable vesting date.  Seventy-five percent (75%) of the Option will
vest based on the Company’s financial performance (based on EBITDA and cash
flow targets to be established by the Board or its committee) each year over
the same four years, subject to the Executive’s continued employment with the
Company on the applicable vesting

 

2

 

date.  The
Option will be subject to the Company’s then applicable stock plan, an option
agreement and the terms of the Company’s stockholders agreement.

 

(e)                                  Stock Purchase Rights.  The
Executive will have the right to purchase shares of common stock of the Company
on or prior to December 31, 2006 at per share price equal to the then
current fair market value of such stock (as reasonably determined by the Board)
and in an amount determined by the Company. 
Such shares of Company common stock shall be subject to the terms of the
Company’s stockholders agreement.

 

(f)                                    Additional Compensation.  The
Company shall work with the Executive to establish a compensation program that
is meant to compensate him for some or all of the pension benefits and other
material compensation that the Executive forfeited as a result of his
terminating employment with his previous employer.  Such program and the amounts paid thereunder
shall be subject to approval by the Board and shall take into account the
compensation and benefits provided in this Agreement.

 

(g)                                 Benefits.  During the
Term, the Executive shall be entitled to participate in employee benefit plans,
programs and arrangements of the Company, as may be amended from time to time,
which are applicable to the senior officers of the Company.  During the Term, the Executive shall also be
entitled to receive (i) annual reimbursements for financial and tax
planning, up to a maximum of $10,000 per year, and (ii) reasonable
temporary living expenses and long-range commuting expenses as mutually agreed
to by the Executive and the Board (or its committee).

 

(h)                                 Vacation.  During the
Term, the Executive shall be entitled to participate in the Company’s vacation
policy as follows:  (i) in calendar
year 2006 the Executive shall be entitled to four (4) weeks of paid
vacation, and (ii) following calendar year 2006 the Executive shall accrue
at least four (4) weeks of paid vacation each year.  Any vacation shall be taken at the reasonable
and mutual convenience of the Company and the Executive.

 

(i)                                     Expenses.  During the
Term, the Company shall reimburse the Executive for all reasonable travel and
other business expenses incurred by him in the performance of his duties to the
Company in accordance with the Company’s expense reimbursement policy.

 

(j)                                     Key Person Insurance.  At
any time during the Term, the Company shall have the right to insure the life
of the Executive for the Company’s sole benefit.  The Company shall have the right to determine
the amount of insurance and the type of policy. 
The Executive shall cooperate with the Company in obtaining such insurance
by submitting to physical examinations, by supplying all information reasonably
required by any insurance carrier, and by executing all necessary documents
reasonably required by any insurance carrier. 
The Executive shall

 

3

 

incur no financial obligation by executing any
required document, and shall have no interest in any such policy.

 

(k)                                  Indemnification.  The
Executive shall be indemnified and held harmless by the Company to the fullest
extent authorized by the Company’s certificate of incorporation or bylaws
against all costs, expenses, liabilities and losses reasonably incurred or
suffered by the Executive as a result of actions taken by the Executive in good
faith and in his capacity as an officer of the Company.

 

3.                                      Termination.

 

The
Executive’s employment hereunder may be terminated by the Company or the
Executive, as applicable, without any breach of this Agreement only under the
following circumstances:

 

(a)                                  Circumstances.

 

(i)                                     Death.  The Executive’s employment hereunder shall
terminate upon his death.

 

(ii)                                  Disability.  If the Executive has incurred a Disability,
the Company may give the Executive written notice of its intention to terminate
the Executive’s employment.

 

(iii)                               Termination for Cause.  The Company may terminate the Executive’s
employment for Cause.

 

(iv)                              Termination without Cause.  The Company may terminate the Executive’s
employment without Cause.

 

(v)                                 Resignation for Good Reason.  The Executive may resign his employment for
Good Reason.

 

(vi)                              Resignation without Good Reason.  The Executive may resign his employment
without Good Reason.

 

(vii)                           Non-extension of Term by the Company.  The Company may give notice of non-extension
to the Executive pursuant to Section 1(b).

 

(viii)                        Non-extension of Term by the Executive.  The Executive may give notice of
non-extension to the Company pursuant to Section 1(b).

 

(b)                                 Notice of Termination.  Any
termination of the Executive’s employment by the Company or by the Executive
under this Section 3 (other than termination pursuant to paragraph
(a)(i)) shall be communicated by a written notice to the other party hereto
indicating the specific termination provision in this Agreement relied upon,
setting forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive’s employment under the 

 

4

 

provision so indicated, and specifying a Date of
Termination which, for terminations under paragraphs (a) (ii), (iv) or
(vi) shall be at least sixty (60) days following the date of such notice
(a “Notice of Termination”); provided, however, that the Company may, in
its sole discretion, advance the Date of Termination to any date following the
Company’s receipt of the Notice of Termination. 
A Notice of Termination submitted by the Company may provide for a Date
of Termination on the date the Executive receives the Notice of Termination, or
any date thereafter elected by the Company in its sole discretion.  The failure by the Executive or the Company
to set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Cause or Good Reason shall not waive any right of
the Executive or the Company hereunder or preclude the Executive or the Company
from asserting such fact or circumstance in enforcing the Executive’s or the
Company’s rights hereunder.

 

(c)                                  Company obligations upon termination.  Upon
termination of the Executive’s employment, the Executive (or the Executive’s
estate) shall be entitled to receive the sum of the Executive’s Annual Base
Salary through the Date of Termination not theretofore paid, any expenses owed
to the Executive under Section 2(i), any accrued vacation pay owed
to the Executive pursuant to Section 2(h), and any amount accrued
and arising from the Executive’s participation in, or benefits accrued under
any employee benefit plans, programs or arrangements under Section 2(g),
which amounts, if any, shall be payable in accordance with the terms and
conditions of such employee benefit plans, programs or arrangements, and such
other or additional benefits as may be, or become, due to him under the
applicable terms of applicable plans, programs, agreements, corporate
governance documents and other arrangements of the Company and its subsidiaries
(collectively, the “Company Arrangements”).  The Executive shall not be entitled to any
other payments or benefits, except as specifically provided in Section 4.

 

4.                                      Severance Payments.

 

(a)                                  Termination for Cause, resignation without
Good Reason, upon Non-extension of Term by the Company or the Executive, upon
death or upon Disability.  If the Executive’s employment
shall terminate pursuant to Section 3(a)(iii) for Cause, Section 3(a)(vi) for
resignation without Good Reason, pursuant to Sections 3(a)(vii) or 3(a)(viii) due
to Non-extension of the Term by the Company or the Executive, or as a result of
Executive’s death pursuant to Section 3(a)(i) or Disability pursuant
to Section 3(a)(ii), the Executive shall not be entitled to any additional
severance payment or benefits.

 

(b)                                 Termination without Cause or resignation for
Good Reason.  If the Executive’s employment shall terminate
without Cause pursuant to Section 3(a)(iv) or for Good Reason
pursuant to Section 3(a)(v), the Company shall, subject to the
Executive signing and not revoking, within sixty (60) days following the Date
of Termination, a release of claims in substantially the form attached hereto
as Exhibit A:

 

5

 

	
  (i)

  	
  pay to the Executive, in equal installments
  over the twelve (12) month period following the Date of Termination in
  accordance with the Company’s regular payroll practice, an amount equal to
  the Annual Base Salary that the Executive would have been entitled to receive
  if the Executive had continued his employment hereunder for a period of
  twelve (12) months following the Date of Termination; and

  
	
   

  	
   

  
	
  (ii)

  	
  cover the premium costs for medical, dental
  and vision benefit coverage under COBRA for the Executive and, where
  applicable, Executive’s spouse and dependents, for a period of twelve (12)
  months following the Date of Termination under one of the Company’s group
  medical plans.

  

 

(c)                                  Survival.  The
expiration or termination of the Term shall not impair the rights or
obligations of any party hereto, which shall have accrued prior to such
expiration or termination.

 

(d)                                 409A. 
Notwithstanding anything to the contrary in this Section 4,
no payments in this Section 4 will be paid during the six-month
period following the Executive’s termination of employment unless the Company
determines, in its good faith judgment, that paying such amounts at the time or
times indicated in this Section would not cause the Executive to incur an
additional tax under Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”) (in which case such amounts shall be paid at the
time or times indicated in this Section). 
If the payment of any amounts are delayed as a result of the previous
sentence, on the first day following the end of the six-month period, the
Company will pay the Executive a lump-sum amount equal to the cumulative amount
that would have otherwise been previously paid to the Executive under this
Agreement.

 

5.                                      Competition.

 

(a)                                  The Executive recognizes and agrees that in
order to assure that the Executive devotes all of the Executive’s professional
time and energy to the operations of the Company while employed by the Company,
and that during and after such employment in order to adequately protect the
Company’s investment in its proprietary information and trade secrets and to
protect such information and secrets and all other confidential information
from disclosures to competitors and to protect the Company from unfair
competition, separate covenants not to compete, not to solicit, and not to
recruit the Company’s employees for the duration and scope set forth below, are
necessary and desirable.  The Executive
understands and agrees that the restrictions imposed in these covenants
represent a fair balance of the Company’s rights to protect its business and
the Executive’s right to pursue employment.

 

(b)                                 The Executive shall not, at any time during
the Term or during the 12-month period following the Date of Termination (the “Non-Compete
Period”), directly or indirectly engage in, have any equity interest in, or
manage or operate any person, firm, corporation, partnership or business
(whether as director, officer, 

 

6

 

employee, agent, representative, partner, security
holder, consultant or otherwise) that engages in any business which competes
with any Business (as defined below) of the Company or its Affiliates anywhere
in the world where the Company conducts business or, on the Date of
Termination, has plans to conduct business in the twelve (12) month period
following the Executive’s Date of Termination; provided, however,
that the Executive shall be permitted to acquire a passive stock interest in
such a business provided the stock acquired is publicly traded and is not more
than two percent (2%) of the outstanding interest in such business.

 

(c)                                  During the Non-Compete Period, the Executive
shall not, directly or indirectly, recruit or otherwise solicit or induce any
employee, customer, subscriber or supplier of the Company (i) to terminate
its employment or arrangement with the Company, (ii) to otherwise change
its relationship with the Company or (iii) to establish any relationship
with the Executive or any of his affiliates for any business purpose
competitive with the Business of the Company.

 

(d)                                 In the event the terms of this Section 5
shall be determined by any court of competent jurisdiction to be unenforceable
by reason of its extending for too great a period of time or over too great a
geographical area or by reason of its being too extensive in any other respect,
it will be interpreted to extend only over the maximum period of time for which
it may be enforceable, over the maximum geographical area as to which it may be
enforceable, or to the maximum extent in all other respects as to which it may
be enforceable, all as determined by such court in such action.

 

(e)                                  As used in this Section 5, (i) the
term “Company” shall include the Company and its direct or indirect
parents, if any, and subsidiaries, and (ii) the term “Business”
shall mean the development, production, sale, maintenance and support for
aerostructures with respect to commercial, military and business jet aircraft,
including (but not limited to) fuselages, wings and wing assemblies,
empennages, aircraft doors, nacelle components and control surfaces, as such business
may be expanded or altered by the Company during the Term.

 

(f)                                    It is recognized and acknowledged by the
Executive that a breach of the covenants contained in this Section 5
may cause irreparable damage to Company and its goodwill, the exact amount of
which will be difficult or impossible to ascertain, and that the remedies at
law for any such breach will be inadequate. 
Accordingly, the Executive agrees that in the event of a breach of any
of the covenant contained in this Section 5, in addition to any
other remedy which may be available at law or in equity, the Company will be
entitled to seek specific performance and injunctive relief.

 

6.                                      Intellectual Property and Confidential Information.

 

The
Executive agrees to enter into the Company’s standard Intellectual Property
Agreement (the “Intellectual Property Agreement”) upon commencing
employment hereunder.

 

7

 

7.                                      Cooperation.

 

The
Executive may respond to a lawful and valid subpoena or other legal process
regarding the Company but shall give the Company the earliest possible notice
thereof, shall, as much in advance of the return date as possible, make
available to the Company and its counsel the documents and other information
sought and shall assist such counsel at Company’s expense in resisting or
otherwise responding to such process.  As
used in this Section 7, the term “Company” shall include the Company and
its direct or indirect parents, if any, and subsidiaries.

 

8.                                      Assignment and Successors.

 

The
Company may assign its rights and obligations under this Agreement to any
successor to all or substantially all of the business or the assets of the
Company (by merger or otherwise and including any Affiliates), and may assign
or encumber this Agreement and its rights hereunder as security for
indebtedness of the Company and its Affiliates. 
This Agreement shall be binding upon and inure to the benefit of the
Company, the Executive and their respective successors, assigns, personnel and
legal representatives, executors, administrators, heirs, distributees,
devisees, and legatees, as applicable. 
None of the Executive’s rights or obligations may be assigned or
transferred by the Executive, other than the Executive’s rights to payments
hereunder, which may be transferred only by will or operation of law.  Notwithstanding the foregoing, the Executive
shall be entitled, to the extent permitted under applicable law and applicable
Company Arrangements, to select and change a beneficiary or beneficiaries to
receive compensation hereunder following his death by giving written notice
thereof to the Company.

 

9.                                      Certain Definitions.

 

(a)                                  Affiliate.  An “Affiliate”
shall mean any entity which owns or controls, is owned or controlled by, or is
under common control with, the Company.

 

(b)                                 Cause.  The
Company shall have “Cause” to terminate the Executive’s employment hereunder
upon:

 

	
  (i)

  	
  The Board’s good faith determination that
  the Executive failed to substantially perform his duties as an employee of
  the Company (other than any such failure resulting from the Executive’s
  Disability) which failure has not been cured within thirty (30) days after
  Executive’s receipt of notice thereof from the Board;

  
	
   

  	
   

  
	
  (ii)

  	
  the Executive’s willful misconduct, gross
  negligence or a breach of fiduciary duty that, in each case or in the
  aggregate, results in material harm to the Company;

  
	
   

  	
   

  
	
  (iii)

  	
  willful and material breach of this
  Agreement or the bylaws of the Company which has not been cured within thirty
  (30) days after Executive’s receipt of notice thereof from the Board;

  
	
   

  	
   

  
	
  (iv)

  	
  the Executive’s having been the subject of
  any order, judicial or administrative, obtained or issued by the Securities
  Exchange

  

 

 

8

 

	
   

  	
  Commission, for any securities violation
  involving fraud, including, for example, any such order consented to by the
  Executive in which findings of facts or any legal conclusions establishing
  liability are neither admitted nor denied;

  
	
   

  	
   

  
	
  (v)

  	
  the Executive’s conviction, plea of no contest,
  plea of nolo contendere, or imposition of
  unadjudicated probation for any felony or crime involving moral turpitude;

  
	
   

  	
   

  
	
  (vi)

  	
  the Executive’s unlawful use (including
  being under the influence) or possession of illegal drugs on the Company’s
  premises or while performing the Executive’s duties and responsibilities
  under this Agreement; or

  
	
   

  	
   

  
	
  (vii)

  	
  the Executive’s commission of an act of
  fraud, embezzlement, or misappropriation, in each case, against the Company.

  

 

(c)                                  Date of Termination.  “Date
of Termination” shall mean (i) if the Executive’s employment is terminated
by his death, the date of his death; (ii) if the Executive’s employment is
terminated pursuant to Section 3(a)(ii) — (vi) either the
date indicated in the Notice of Termination or the date specified by the
Company pursuant to Section 3(b), whichever is earlier; (iii) if
the Executive’s employment is terminated pursuant to Section 3(a)(vii) or
Section 3(a)(viii), the expiration of the then-applicable Term.

 

(d)                                 Disability.  “Disability”
shall mean, at any time the Company or any of its Affiliates sponsors a
long-term disability plan for the Company’s employees “disability” as defined
in such long-term disability plan for the purpose of determining a participant’s
eligibility for benefits, provided, however, if the long-term disability plan
contains multiple definitions of disability, “Disability” shall refer that
definition of disability which, if the Executive qualified for such disability
benefits, would provide coverage for the longest period of time.  The determination of whether the Executive
has a Disability shall be made by the person or persons required to make
disability determinations under the long-term disability plan.  At any time the Company does not sponsor a
long-term disability plan for its employees, Disability shall mean the
Executive’s inability to perform, with or without reasonable accommodation, the
essential functions of his position hereunder for a total of three months
during any six-month period as a result of incapacity due to mental or physical
illness as determined by a physician selected by the Company or its insurers
and acceptable to the Executive or the Executive’s legal representative, such
agreement as to acceptability not to be unreasonably withheld or delayed.  Any refusal by the Executive to submit to a
medical examination for the purpose of determining Disability shall be deemed
to constitute conclusive evidence of the Executive’s Disability.

 

9

 

(e)           Good Reason.  The
Executive shall have “Good Reason” to resign his employment within ninety (90)
days following the occurrence of any of the following events:

 

	
  (A)

  	
  a material diminution in the nature or
  scope of the Executive’s responsibilities, authorities or duties or the
  assignment of duties and responsibilities materially inconsistent with those
  normally associated with Executive’s position; or

  
	
   

  	
   

  
	
  (B)

  	
  a material reduction in the amount of the
  Executive’s Annual Base Salary;

  
	
   

  	
   

  
	
  (C)

  	
  any material breach of this Agreement by
  the Company or any Affiliate; or

  
	
   

  	
   

  
	
  (D)

  	
  any purported termination by the Company of
  Executive’s employment other than as expressly provided under this Agreement.

  

 

Notwithstanding
the foregoing, the Executive may not resign his employment for Good Reason
unless (E) the Executive provided the Company with at least 30 days prior
written notice of his intent to resign for Good Reason (which 30 days shall not
count against the 90 day period above); and (F) the Company has not
remedied the alleged violation(s) within the 30-day period (which 30 days
shall not count against the 90 day period above).

 

10.          Governing
Law.

 

This
Agreement shall be governed, construed, interpreted and enforced in accordance
with its express terms, and otherwise in accordance with the substantive laws
of the State of Texas, without reference to the principles of its conflicts of
law, and where applicable, the laws of the United States.

 

11.          Validity.

 

The
invalidity or unenforceability of any provision or provisions of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.

 

12.          Notices.

 

Any
notice, request, claim, demand, document and other communication hereunder to any
party shall be effective upon receipt (or refusal of receipt) and shall be in
writing and delivered personally or sent by facsimile or certified or
registered mail, postage prepaid, as follows:

 

10

 

(a)           If to the Company:

 

Vought
Aircraft Industries, Inc.

9314 West Jefferson Blvd.

Dallas, TX  75211

Attn:  Bruce White, Jr.

Facsimile:  (972) 946-5642

 

c/o
The Carlyle Group

1001 Pennsylvania Avenue, N.W.

Washington, DC  20004-2505

Attn:  Adam Palmer

Facsimile:  (202) 347-1818

 

and
a copy to:

 

Latham &
Watkins LLP

555 Eleventh Street, N.W.

10th Floor

Washington, DC  20004

Fax:  (202) 637-2201

Attn:  Paul F. Sheridan, Esq.

 

(b)           If to the Executive:

 

Elmer
Doty

1348 Stonehenge Drive

York, PA  17404

 

or
at any other address as any party shall have specified by notice in writing to
the other party.

 

13.          Counterparts.

 

This
Agreement may be executed in several counterparts, each of which shall be
deemed to be an original, but all of which together will constitute one and the
same Agreement.  Signatures delivered by
facsimile shall be deemed effective for all purposes.

 

14.          Entire
Agreement.

 

The
terms of this Agreement, including the terms of the Intellectual Property
Agreement, are intended by the parties to be the final expression of their
agreement with respect to the employment of the Executive by the Company and
supersede all prior understandings and agreements, whether written or
oral.  The parties further intend that this
Agreement shall constitute the complete and exclusive statement of their terms
and that no extrinsic evidence whatsoever may be introduced in any judicial,
administrative, or other legal proceeding to vary the terms of this Agreement.

 

11

 

15.          Amendments;
Waivers.

 

This
Agreement may not be modified, amended, or terminated except by an instrument
in writing, signed by the Executive and a duly authorized officer of
Company.  By an instrument in writing
similarly executed, the Executive or a duly authorized officer of the Company
may waive compliance by the other party or parties with any specifically
identified provision of this Agreement that such other party was or is
obligated to comply with or perform; provided, however, that such waiver shall
not operate as a waiver of, or estoppel with respect to, any other or
subsequent failure.  No failure to
exercise and no delay in exercising any right, remedy, or power hereunder
preclude any other or further exercise of any other right, remedy, or power provided
herein or by law or in equity.  Except as
otherwise set forth in this Agreement, the respective rights and obligations of
the parties under this Agreement shall survive any termination of Executive’s
employment.  In addition, Sections 2(k),
4 and 6 through 22 shall survive beyond the end of the Term in accordance with
their terms.

 

16.          No
Inconsistent Actions.

 

The
parties hereto shall not voluntarily undertake or fail to undertake any action
or course of action inconsistent with the provisions or essential intent of
this Agreement.  Furthermore, it is the
intent of the parties hereto to act in a fair and reasonable manner with
respect to the interpretation and application of the provisions of this
Agreement.

 

17.          Construction.

 

This
Agreement shall be deemed drafted equally by both the parties.  Its language shall be construed as a whole
and according to its fair meaning.  Any
presumption or principle that the language is to be construed against any party
shall not apply.  The headings in this
Agreement are only for convenience and are not intended to affect construction
or interpretation.  Any references to
paragraphs, subparagraphs, sections or subsections are to those parts of this
Agreement, unless the context clearly indicates to the contrary.  Also, unless the context clearly indicates to
the contrary, (a) the plural includes the singular and the singular
includes the plural; (b) “and” and “or” are each used both conjunctively
and disjunctively; (c) “any,” “all,” “each,” or “every” means “any and
all,” and “each and every”; (d) “includes” and “including” are each “without
limitation”; (e) “herein,” “hereof,” “hereunder” and other similar
compounds of the word “here” refer to the entire Agreement and not to any
particular paragraph, subparagraph, section or subsection; and (f) all
pronouns and any variations thereof shall be deemed to refer to the masculine,
feminine, neuter, singular or plural as the identity of the entities or persons
referred to may require.

 

18.          Arbitration.

 

Any
dispute or controversy arising under or in connection with this Agreement,
other than disputes or controversies arising under or in connection with the
provisions of Section 5  or
the provisions in the Intellectual Property Agreement, shall be settled
exclusively by arbitration, conducted before an arbitrator in Dallas, Texas in
accordance with the National Rules for the Resolution of Employment
Disputes of the American Arbitration Association then in effect.  Judgment may be entered on the arbitration
award in any court having jurisdiction. 
Only 

 

12

 

individuals
who are on the AAA register of arbitrators shall be selected as an
arbitrator.  Within 20 days of the
conclusion of the arbitration hearing, the arbitrator(s) shall prepare
written findings of fact and conclusions of law.  It is mutually agreed that the written
decision of the arbitrator(s) shall be valid, binding, final and
non-appealable, provided however, that the parties hereto agree that the
arbitrator shall not be empowered to award punitive damages against any party
to such arbitration.  Each party shall
pay its own attorney’s fees and expenses.

 

19.          Enforcement.

 

If
any provision of this Agreement is held to be illegal, invalid or unenforceable
under present or future laws effective during the term of this Agreement, such
provision shall be fully severable; this Agreement shall be construed and
enforced as if such illegal, invalid or unenforceable provision had never
comprised a portion of this Agreement; and the remaining provisions of this
Agreement shall remain in full force and effect and shall not be affected by
the illegal, invalid or unenforceable provision or by its severance from this
Agreement.  Furthermore, in lieu of such
illegal, invalid or unenforceable provision there shall be added automatically
as part of this Agreement a provision as similar in terms to such illegal,
invalid or unenforceable provision as may be possible and be legal, valid and
enforceable.

 

20.          Withholding.

 

The
Company shall be entitled to withhold from any amounts payable under this
Agreement any federal, state, local or foreign withholding or other taxes or
charges which the Company is required to withhold.  The Company shall be entitled to rely on an
opinion of counsel if any questions as to the amount or requirement of
withholding shall arise.

 

21.          Section 409A.

 

To
the extent that the Company reasonably determines that any compensation or
benefits payable under this Agreement are subject to Section 409A of the
Code, this Agreement shall incorporate the terms and conditions required by Section 409A
of the Code and Department of Treasury regulations as reasonably determined by
the Company and the Executive.  To the
extent applicable, this Agreement shall be interpreted in accordance with Section 409A
of the Code and Department of Treasury regulations and other interpretative
guidance issued thereunder, including without limitation any such regulations
or other such guidance that may be issued after the Effective Date.  Notwithstanding any provision of this
Agreement to the contrary, in the event that following the Effective Date the
Company reasonably determines that any compensation or benefits payable under
this Agreement may be subject to Section 409A of the Code and related
Department of Treasury guidance (including such Department of Treasury guidance
as may be issued after the Effective Date), the Company and the Executive shall
work together to adopt such amendments to this Agreement or adopt other
policies or procedures (including amendments, policies and procedures with
retroactive effective), or take any other commercially reasonable actions
necessary or appropriate to (a) exempt the compensation and benefits
payable under this Agreement from Section 409A of the Code and/or preserve
the intended tax treatment of the compensation and benefits provided with
respect to this Agreement, or (b) comply with the requirements of Section 409A
of the Code and related Department of Treasury guidance.

 

13

 

22.          Employee
Acknowledgement.

 

The
Executive acknowledges that he has read and understands this Agreement, is
fully aware of its legal effect, has not acted in reliance upon any
representations or promises made by the Company other than those contained in
writing herein, and has entered into this Agreement freely based on his own
judgment.

 

[remainder of page intentionally left blank]

 

14

 

IN
WITNESS WHEREOF, the parties have executed this Agreement on the date and year
first above written.

 

	
   

  	
  VOUGHT
  AIRCRAFT INDUSTRIES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  W. Bruce White, Jr.

  
	
   

  	
  Name:

  	
  W.
  Bruce White, Jr.

  
	
   

  	
  Title:

  	
  Vice
  President and General Counsel

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Elmer Doty

  
	
   

  	
   

  	
  Name:
  Elmer Doty

  

 

15

 

EXHIBIT A

 

For
and in consideration of the payments and other benefits due to Elmer Doty (the “Executive”)
pursuant to the Employment Agreement dated as of March 29, 2006 (the “Employment
Agreement”), by and between Vought Aircraft Industries, Inc., (the “Company”)
and the Executive, and for other good and valuable consideration, the Executive
hereby agrees, for the Executive, the Executive’s spouse and child or children
(if any), the Executive’s heirs, beneficiaries, devisees, executors,
administrators, attorneys, personal representatives, successors and assigns, to
forever release, discharge and covenant not to sue the Company, The Carlyle
Group or any of their respective divisions, affiliates, subsidiaries, parents,
branches, predecessors, successors, assigns, and, with respect to such
entities, their officers, directors, trustees, employees, agents, shareholders,
administrators, general or limited partners, representatives, attorneys, insurers
and fiduciaries, past, present and future (the “Released Parties”) from
any and all claims of any kind arising out of, or related to, his employment
with the Company, its affiliates and subsidiaries (collectively, with the
Company, the “Affiliated Entities”), the Executive’s separation from
employment with the Affiliated Entities, which the Executive now has or may
have against the Released Parties, whether known or unknown to the Executive,
by reason of facts which have occurred on or prior to the date that the
Executive has signed this Release.  Such
released claims include, without limitation, any and all claims relating to the
foregoing under federal, state or local laws pertaining to employment,
including, without limitation, the Age Discrimination in Employment Act, Title
VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. Section 2000e et.
seq., the Fair Labor Standards Act, as amended, 29 U.S.C. Section 201 et.
seq., the Americans with Disabilities Act, as amended, 42 U.S.C. Section 12101
et. seq. the Reconstruction Era Civil Rights Act, as amended, 42 U.S.C. Section 1981
et. seq., the Rehabilitation Act of 1973, as amended, 29 U.S.C. Section 701
et. seq., the Family and Medical Leave Act of 1992, 29 U.S.C. Section 2601
et. seq., and any and all state or local laws regarding employment
discrimination and/or federal, state or local laws of any type or description
regarding employment, including but not limited to any claims arising from or
derivative of the Executive’s employment with the Affiliated Entities, as well
as any and all such claims under state contract or tort law.

 

The
Executive has read this Release carefully, acknowledges that the Executive has
been given at least 21 days to consider all of its terms and has been advised
to consult with any attorney and any other advisors of the Executive’s choice
prior to executing this Release, and the Executive fully understands that by
signing below the Executive is voluntarily giving up any right which the
Executive may have to sue or bring any other claims against the Released
Parties, including any rights and claims under the Age Discrimination in
Employment Act.  The Executive also
understands that the Executive has a period of seven days after signing this
Release within which to revoke his agreement, and that neither the Company nor
any other person is obligated to make any payments or provide any other
benefits to the Executive pursuant to the Agreement until eight days have
passed since the Executive’s signing of this Release without the Executive’s
signature having been revoked other than any accrued obligations or other
benefits payable pursuant to the terms of the Company’s normal payroll
practices or employee benefit plans. 
Finally, the Executive has not been forced or pressured in any manner
whatsoever to sign this Release, and the Executive agrees to all of its terms
voluntarily.

 

 

Notwithstanding
anything else herein to the contrary, this Release shall not affect:  (i) the Company’s obligations under any
compensation or employee benefit plan, program or arrangement (including,
without limitation, obligations to the Executive under any stock option, stock
award or agreements or obligations under any pension, deferred compensation or
retention plan) provided by the Affiliated Entities where the Executive’s
compensation or benefits are intended to continue or the Executive is to be
provided with compensation or benefits, in accordance with the express written
terms of such plan, program or arrangement, beyond the date of the Executive’s
termination; or (ii) rights to indemnification the Executive may have as
an insured under any director’s and officer’s liability insurance policy now or
previously in force.

 

This
Release is final and binding and may not be changed or modified except in a
writing signed by both parties.

 

 

	
  Date

  	
   

  	
  Elmer
  Doty

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date

  	
   

  	
  Vought
  Aircraft Industries, Inc.

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