Document:

exv10w49

 

Exhibit 10.49

 

AXLE MANUFACTURING, LLC

Limited Liability Company Agreement

Organized Under the Delaware Limited

Liability Company Act

 

     THE INTERESTS DESCRIBED AND REPRESENTED BY THIS OPERATING AGREEMENT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “33 ACT”) OR ANY APPLICABLE STATE SECURITIES
LAWS (THE “STATE ACTS”) AND ARE RESTRICTED SECURITIES AS THAT TERM IS DEFINED IN RULE 144 UNDER THE
33 ACT. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT OR QUALIFICATION UNDER THE 33 ACT AND APPLICABLE STATE ACTS
OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE 33 ACT AND APPLICABLE STATE ACTS, THE
AVAILABILITY OF WHICH MUST BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY.

 

 

	 	 	 	 	 	 	 	 	 
	ARTICLE I
	 	     ORGANIZATIONAL MATTERS; DEFINITIONS
	 	 	1	 
	 	 	 	 	 	 	 	 	 
	 	1.1	 	 	Name
	 	 	1	 
	 	1.2	 	 	Effective Date; Term
	 	 	1	 
	 	1.3	 	 	Registered Office; Place of Business; Agent
	 	 	1	 
	 	1.4	 	 	Intent to Supersede Act
	 	 	1	 
	 	1.5	 	 	Definitions
	 	 	1	 
	 	1.6	 	 	Authorized Person
	 	 	1	 
	 	 	 	 	 	 	 	 	 
	ARTICLE II
	 	     PURPOSE
	 	 	2	 
	 	 	 	 	 	 	 	 	 
	 	2.1	 	 	Purpose
	 	 	2	 
	 	 	 	 	 	 	 	 	 
	ARTICLE III
	 	     MEMBERS; RIGHTS OF AND LIMITATIONS ON MEMBERS
	 	 	2	 
	 	 	 	 	 	 	 	 	 
	 	3.1	 	 	Members; Guarantee of Obligations
	 	 	2	 
	 	3.2	 	 	Limitations on Members
	 	 	2	 
	 	3.3	 	 	By-laws
	 	 	3	 
	 	3.4	 	 	Title to Property
	 	 	3	 
	 	3.5	 	 	Payments of Individual Obligations
	 	 	3	 
	 	3.6	 	 	Members May Compete
	 	 	3	 
	 	 	 	 	 	 	 	 	 
	ARTICLE IV
	 	     BOARD OF DIRECTORS; EXECUTIVE COMMITTEE; RIGHTS, POWERS AND DUTIES; VOTING; OTHER MATTERS CONCERNING MEMBERS
	 	 	4	 
	 	 	 	 	 	 	 	 	 
	 	4.1	 	 	Management of the Company
	 	 	4	 
	 	4.2	 	 	Board of Directors
	 	 	4	 
	 	4.3	 	 	Executive Committee
	 	 	4	 
	 	4.4	 	 	Executive Committee Voting; Meeting
	 	 	5	 
	 	4.5	 	 	Required Approvals of Executive Committee
	 	 	6	 
	 	4.6	 	 	Appointment of Officers; Delegation of Authority
	 	 	7	 
	 	4.7	 	 	Exculpation of Members and Representative
	 	 	8	 
	 	4.8	 	 	Resignation and Removal of Representative; Vacancies
	 	 	8	 
	 	4.9	 	 	Tax Elections; Tax Matters Member
	 	 	8	 
	 	 	 	 	 	 	 	 	 
	ARTICLE V
	 	     RIGHTS, POWERS AND DUTIES OF OFFICERS
	 	 	9	 
	 	 	 	 	 	 	 	 	 
	 	5.1	 	 	Officers
	 	 	9	 
	 	5.2	 	 	Rights and Responsibilities of Officers
	 	 	9	 
	 	5.3	 	 	Salaries
	 	 	12	 
	 	 	 	 	 	 	 	 	 
	ARTICLE VI
	 	     BUY-SELL RIGHTS; CALL RIGHTS
	 	 	12	 
	 	 	 	 	 	 	 	 	 
	 	6.1	 	 	Offer to Buy-Sell
	 	 	12	 
	 	6.2	 	 	Call Rights
	 	 	13	 
	 	 	 	 	 	 	 	 	 
	ARTICLE VII
	 	     COMPANY CAPITAL; ADVANCES BY MEMBERS
	 	 	14	 
	 	 	 	 	 	 	 	 	 
	 	7.1	 	 	Capital Contributions
	 	 	14	 
	 	7.2	 	 	Additional Capital Contributions
	 	 	14	 

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	 	7.3	 	 	No Return of Contributions
	 	 	14	 
	 	7.4	 	 	No Partition of Company Property
	 	 	14	 
	 	 	 	 	 	 	 	 	 
	ARTICLE VIII
	 	     FISCAL YEAR; ACCOUNTING; ALLOCATION OF PROFITS AND LOSSES; DISTRIBUTIONS
	 	 	15	 
	 	 	 	 	 	 	 	 	 
	 	8.1	 	 	Fiscal Year
	 	 	15	 
	 	8.2	 	 	Method of Accounting
	 	 	15	 
	 	8.3	 	 	Maintenance of Capital Accounts
	 	 	15	 
	 	8.4	 	 	Allocation of Profits and Losses
	 	 	15	 
	 	8.5	 	 	Distribution of Net Cash Flow
	 	 	16	 
	 	8.6	 	 	Definition of Net Cash Flow
	 	 	17	 
	 	8.7	 	 	Liability of Member for Return of Distribution
	 	 	17	 
	 	 	 	 	 	 	 	 	 
	ARTICLE IX
	 	     TRANSFER OF COMPANY INTERESTS
	 	 	17	 
	 	 	 	 	 	 	 	 	 
	 	9.1	 	 	No Transfer of Company Interest
	 	 	17	 
	 	9.2	 	 	Compliance with Securities Act of 1933
	 	 	18	 
	 	9.3	 	 	Transfer of Interest to Affiliates
	 	 	18	 
	 	9.4	 	 	Transfer of Interest of Initial Member
	 	 	18	 
	 	9.5	 	 	Admission of Transferee as Substituted Member
	 	 	18	 
	 	9.6	 	 	Allocations and Distributions with Respect to Transferred Interests
	 	 	19	 
	 	 	 	 	 	 	 	 	 
	ARTICLE X
	 	     WITHDRAWAL, BANKRUPTCY OR LIQUIDATION OF MEMBERS
	 	 	19	 
	 	 	 	 	 	 	 	 	 
	 	10.1	 	 	Withdrawal of Member
	 	 	19	 
	 	10.2	 	 	Bankruptcy, Liquidation of a Member
	 	 	19	 
	 	10.3	 	 	Bankruptcy of Member
	 	 	19	 
	 	 	 	 	 	 	 	 	 
	ARTICLE XI
	 	     TERMINATION, DISSOLUTION AND LIQUIDATION OF THE COMPANY
	 	 	19	 
	 	 	 	 	 	 	 	 	 
	 	11.1	 	 	Events of Dissolution
	 	 	19	 
	 	11.2	 	 	Liquidation
	 	 	20	 
	 	11.3	 	 	Election of Liquidating Trustee
	 	 	20	 
	 	11.4	 	 	Statements
	 	 	20	 
	 	 	 	 	 	 	 	 	 
	ARTICLE XII
	 	     AMENDMENT OF THE AGREEMENT
	 	 	21	 
	 	 	 	 	 	 	 	 	 
	 	12.1	 	 	Ordinary Course Amendments
	 	 	21	 
	 	12.2	 	 	Other Amendments
	 	 	21	 
	 	 	 	 	 	 	 	 	 
	ARTICLE XIII
	 	     TAX PROVISIONS
	 	 	21	 
	 	 	 	 	 	 	 	 	 
	 	13.1	 	 	Allocations Required by Treasury Regulations
	 	 	21	 
	 	13.2	 	 	Rules of Application
	 	 	23	 
	 	13.3	 	 	Rules Concerning Calculations of Profits and Losses and Code Section 704(c) Tax Allocations
	 	 	23	 

 - ii - 

 

 

	 	 	 	 	 	 	 	 	 
	ARTICLE XIV
	 	      ADDITIONAL COVENANTS; OTHER AGREEMENTS
	 	 	25	 
	 	 	 	 	 	 	 	 	 
	 	14.1	 	 	Confidentiality; Trade Secrets; Use of Names, Etc
	 	 	25	 
	 	14.2	 	 	Supply Agreement
	 	 	25	 
	 	14.3	 	 	Marketing Agreement
	 	 	25	 
	 	14.4	 	 	Press Release
	 	 	25	 
	 	 	 	 	 	 	 	 	 
	ARTICLE XV
	 	     INDEMNIFICATION
	 	 	26	 
	 	 	 	 	 	 	 	 	 
	 	15.1	 	 	Indemnification as to Actions or Omissions in Company’s Business
	 	 	26	 
	 	15.2	 	 	Cross Indemnification
	 	 	26	 
	 	15.3	 	 	Procedure for Indemnification
	 	 	26	 
	 	15.4	 	 	Survival
	 	 	27	 
	 	 	 	 	 	 	 	 	 
	ARTICLE XVI
	 	     DEFAULT AND REMEDIES
	 	 	27	 
	 	 	 	 	 	 	 	 	 
	 	16.1	 	 	Defaults
	 	 	27	 
	 	16.2	 	 	Remedies
	 	 	27	 
	 	 	 	 	 	 	 	 	 
	ARTICLE XVII
	 	     MISCELLANEOUS
	 	 	28	 
	 	 	 	 	 	 	 	 	 
	 	17.1	 	 	Notices
	 	 	28	 
	 	17.2	 	 	Governing Law
	 	 	28	 
	 	17.3	 	 	Business Practices
	 	 	28	 
	 	17.4	 	 	Counterparts
	 	 	28	 
	 	17.5	 	 	Language Conventions; Captions
	 	 	28	 
	 	17.6	 	 	Entire Agreement
	 	 	28	 
	 	17.7	 	 	Provisions Severable
	 	 	28	 
	 	17.8	 	 	Binding Agreement
	 	 	29	 
	 	17.9	 	 	Further Action
	 	 	29	 
	 	17.10	 	 	Waivers
	 	 	29	 

Schedule A, List of Members, Addresses, Etc.

Appendix A, Definitions

Exhibit A, Supply Agreement

Exhibit B, Marketing Agreement

 - iii - 

 

 

AXLE MANUFACTURING, LLC

Limited Liability Company Agreement

     This Limited Liability Company Agreement (this “Agreement”) evidences the mutual agreement of
the Members (as hereinafter defined) in consideration of their contributions and promises each to
the others, for the purpose of forming a limited liability company pursuant to the Delaware Limited
Liability Company Act, Del. Code Ann. title 6, §§18-101 et. seq., as the same may be amended from
time to time (the “Act”).

ARTICLE I

ORGANIZATIONAL MATTERS; DEFINITIONS

     1.1 Name. The name of the limited liability company governed hereby (the “Company”)
is Axle Manufacturing, LLC. The Company may operate the business under one or more fictitious
names.

     1.2 Effective Date; Term. This Agreement shall become effective on June 28, 2007
(“Effective Date”), and shall continue until terminated pursuant to the provisions of this
Agreement.

     1.3 Registered Office; Place of Business; Agent. The address of the registered office
of the Company as required by §18-104 of the Act and the principal place of business of the Company
(which need not be the same as the registered office) shall be as indicated on Schedule A attached
hereto. The Company may change the location of the registered office, establish additional offices
or places of business or enter into such contracts or hire such agents in such other locations,
inside and outside of Delaware, as it deems necessary or desirable in the conduct of the business
of the Company. The agent of the Company for service of process, as required by §18-104 of the
Act, shall be The Corporation Trust Company, 1209 Orange Street, Wilmington, DE 19801.

     1.4 Intent to Supersede Act. The Members intend that the terms of this Agreement
control all the activities of the Company. Therefore, this Agreement supersedes all non-mandatory
provisions of the Act.

     1.5 Definitions. Capitalized terms used in this Agreement have the meanings as
defined throughout the text of this Agreement or in Appendix A. A list of defined terms, including
the section of this Agreement in which the term is defined, is contained in Appendix A.

     1.6 Authorized Person. Robert J. Minkus is hereby designated an “authorized person”
within the meaning of the Act, and is hereby authorized to execute, deliver and file the
certificate of formation required by §18-201 of the Act (“Certificate”) with the secretary of state
of Delaware. Upon completing the foregoing duties, his powers as an “authorized person” shall
cease, and any “authorized person” shall hereafter be designated by the Executive Committee.

- 1 -

 

ARTICLE II

PURPOSE

     2.1 Purpose. The purpose of the Company is to acquire or lease real property and the
other assets for the purpose of constructing a facility (the “Facility”) to manufacture and sell
railcar axles (the “Business”) and to operate the Business and to exercise all powers and engage in
all activities incident thereto. Without limiting the foregoing, but subject to the provisions of
this Agreement, the Company may enter into such arrangements, including the formation of
subsidiaries and the transfer of its properties to such subsidiaries, in such form and manner as
may be prudent and appropriate to acquire the Facility and conduct the Business.

ARTICLE III

MEMBERS; RIGHTS OF AND LIMITATIONS ON MEMBERS

     3.1 Members; Guarantee of Obligations. The initial Members are (i) ARI Component
Venture LLC, a Delaware limited liability company (the “ARI Member”) and wholly-owned subsidiary of
American Railcar Industries, Inc., a Delaware corporation, and (ii) ASF-Keystone, Inc., a Delaware
corporation (the “ASF Member”) and wholly-owned subsidiary of Amsted Industries Incorporated, a
Delaware corporation. The terms “ARI Member” and “ASF Member” shall include, respectively, any
transferees of such Member (as defined below) pursuant to section 9.3 hereto. The names and
addresses of the members of the Company (the “Members”), as they may be from time to time, will be
set forth on Schedule A, as amended from time to time. Schedule A also identifies the amount of
each Member’s initial contribution to the capital of the Company, the number of Units credited to
each Member and each Member’s Percentage Interest.

     Additional Members may be added upon approval of the Executive Committee. Any such new
Members will be permitted, upon such approval, to purchase Units at an amount per Unit to be
determined by the Executive Committee, provided, however, that the ownership of all such additional
Members may not, individually or in the aggregate, reduce the collective percentage held by the ARI
Member and the ASF Member (and their respective transferees) to less than 60% of the outstanding
Units of the Company.

     American Railcar Industries, Inc. and Amsted Industries Incorporated hereby agree to
absolutely and unconditionally guarantee the obligations, respectively, of the ARI Member and the
ASF Member (and their respective transferees pursuant to section 9.3), pursuant to sections 6.1,
7.1 and 7.2 of this Agreement. To the maximum extent provided by law, such guarantee obligations
shall not be reduced or modified by anything that would otherwise constitute a defense by a
guarantor. The Executive Committee may require, at its discretion, as a condition to approval of
an additional Member, a similar guaranty from the parent (if any) of the additional Member.

     3.2 Limitations on Members. No Member may:

     (a) Sign for or bind the Company by virtue of being a Member, direct or bind the
Company on environmental or other issues or hold itself out as an agent of another Member;

- 2 -

 

     (b) Have such Member’s Capital Contribution repaid except to the extent provided in
this Agreement;

     (c) Except as permitted by this Agreement, withdraw from the Company;

     (d) Sell or assign such Member’s interest in the Company or constitute the purchaser or
assignee thereunder a substituted Member, except as provided in Articles VI and IX hereof;

     (e) Except as permitted by this Agreement, have priority over any other Member, either
as to the return of Capital Contributions or as to the allocation of Profits, Losses or the
distribution of Net Cash Flow, provided that this limitation shall not apply to the
repayment by the Company of loans (as distinguished from Capital Contributions) which a
Member was permitted to make under this Agreement and has made to the Company; or

     (f) Have any preemptive or preferential right, including any such right with respect to
(i) additional Capital Contributions; (ii) issuance or sale of Units, whether unissued or
hereafter created; (iii) issuance of any obligations, evidences of indebtedness or other
securities of the Company convertible into or exchangeable for, or carrying or accompanied
by any rights to receive, purchase or subscribe to, any such unissued Units; (iv) issuance
of any right of, subscription to or right to receive, or any warrant or option for the
purchase of, any of the foregoing securities; or (v) issuance or sale of any other
securities that may be issued or sold by the Company.

     3.3 By-laws. The Company may adopt By-laws approved by the Executive Committee for
the conduct of the Company’s business and regulation of its affairs that are not inconsistent with
the Certificate or this Agreement.

     3.4 Title to Property. All property owned by the Company shall be owned by the
Company or a subsidiary as an entity, and no Member shall have any ownership interest in such
property in its individual name or right. The Company shall hold all of its property in the name
of the Company or a subsidiary and not in the name of any Member. Each Member’s interest in the
Company shall be personal property for all purposes.

     3.5 Payments of Individual Obligations. The Company’s credit and assets shall be used
solely for the benefit of the Company, and no asset of the Company shall be transferred or
encumbered for or in payment of any individual obligation of a Member. Notwithstanding the
preceding, the Company shall reimburse a Member for legitimate expenses incurred on behalf of the
Company, including a fair amount for the time of any employee or non-executive officer of a Member
rendering services to the Company on a full-time or part-time basis. No reimbursement shall be due
or payable with respect to the time of any executive officer of any Member.

     3.6 Members May Compete. Members shall not in any way be prohibited from or
restricted in engaging or owning an interest in any other business venture of any nature, including
any venture which might be competitive with the business of the Company.

- 3 -

 

ARTICLE IV

BOARD OF DIRECTORS;

EXECUTIVE COMMITTEE;

RIGHTS, POWERS AND DUTIES; VOTING;

OTHER MATTERS CONCERNING MEMBERS

     4.1 Management of the Company. The Members shall manage or cause to be managed the
affairs of the Company in a prudent and businesslike manner. Members shall act through an
Executive Committee (the “Executive Committee”) for the ordinary course management of the Business,
and the affairs and property of the Company, as further described below in section 4.3.
Additionally, certain specified extraordinary actions may be taken by the Company only if approved
by the Board of Directors, as further described in section 4.2.

     4.2 Board of Directors.

     (a) Each Member shall have one seat on the Board of Directors upon becoming a Member,
provided that as long as a Member holds at least 30% of the outstanding Units, such Member
shall have two seats on the Board of Directors.

     (b) Except as otherwise expressly set forth in this Agreement, or required by the Act,
the vote or consent by at least a majority of Board of Directors members shall be required
for the Board of Directors to take any action required or allowed under the terms of this
Agreement relating to the merger, sale or other transfer of ownership or change of control
of the Company, including a sale of substantially all of the assets of the Company.

     (c) A majority of the Board members must be present to constitute a quorum. Any Member
may participate in a meeting of the Board of Directors by means of conference telephone or
similar communications equipment by means of which all persons participating in the meeting
can hear each other and participation in the meeting by means of such equipment will
constitute presence in person at such meeting. At any meeting of the Board of Directors,
the Members shall appoint a person to act as secretary of the meeting, who shall promptly
prepare and certify a minute of action taken at the meeting. The ARI Representative shall
serve as chairman of each meeting of the Board of Directors during 2007 and every second
year thereafter, and the ASF Representative shall serve as chairman of each meeting of the
Board of Directors during 2008 and every second year thereafter. The chairman shall be
responsible for the organization and conduct of the meeting in accordance with rules and
procedures prescribed by the By-laws (if any).

     (d) For decisions regarding all matters other than those set forth in section 4.2(b)
hereto, the Members shall act through the Executive Committee, as described in section 4.3.

     4.3 Executive Committee.

     (a) The Executive Committee shall be comprised of two representatives (each, a
“Representative” and together the “Representatives”), one appointed by the ARI

- 4 -

 

Member (the “ARI Representative”) and one appointed by the ASF Member (the “ASF
Representative”). Either of the ARI Member or the ASF Member may designate its
Representative, and remove and replace its Representative, immediately upon providing
written notice thereof to the other Members and all Representatives. The initial ARI
Representative will be James Unger, and the initial ASF Representative will be John Wories,
Jr. No Representative shall be entitled to compensation for serving in such capacity, but
shall receive reimbursement for his reasonable expenses.

     (b) The Representatives, acting as the Executive Committee, shall have full and
complete authority, power and discretion to manage and control the Business, affairs and
property of the Company, to make all decisions regarding those matters and to perform any
and all other acts or activities customary or incident to the management of the Company’s
business and objectives, within the terms of and limitations set forth by this Agreement.
No one Representative may take or effect any action on behalf of the Company or otherwise
bind the Company in the absence of a formal delegation of authority by the Executive
Committee to such Representative, except as otherwise permitted by this Agreement. Unless
authorized to do so by this Agreement or by the Executive Committee, no Member, Officer,
attorney-in-fact, employee or other agent of the Company shall have any power or authority
to bind the Company.

     4.4 Executive Committee Voting; Meeting.

     (a) The approval of the Executive Committee of any action on behalf of the Company must
be evidenced by a minute of a meeting of the Executive Committee properly noticed and held
as provided in the by-laws or by a unanimous written consent signed by all Representatives.

     (b) The Executive Committee shall meet at least once each year in a location agreed
upon by the ARI Member and the ASF Member. Either of the ARI Member and the ASF Member may
call additional meetings of the Executive Committee at any time upon at least five but no
more than 20 days written notice to the other Members and all Representatives. All
Representatives must be present to constitute a quorum. Any Representative may participate
in a meeting of the Executive Committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the meeting can hear
each other and participation in the meeting by means of such equipment will constitute
presence in person at such meeting. At any meeting of the Executive Committee, the
Representatives shall appoint a person to act as secretary of the meeting, who shall
promptly prepare and certify a minute of action taken at the meeting. The ARI
Representative shall serve as chairman of each meeting of the Executive Committee during
2007 and every second year thereafter, and the ASF Representative shall serve as chairman of
each meeting of the Executive Committee during 2008 and every second year thereafter. The
chairman shall be responsible for the organization and conduct of the meeting in accordance
with rules and procedures prescribed by the By-laws (if any).

- 5 -

 

     4.5 Required Approvals of Executive Committee. In furtherance of section 4.3(b) and
not by way of limitation, the Company may take any of the following actions with the unanimous
approval of the Executive Committee, and only with such unanimous approval:

     (a) Sell, transfer, exchange, grant perpetual licenses, or otherwise dispose of
all or substantially all the Company’s assets (including those in any Facility),
including goodwill, in a single or series of transactions, or merge, consolidate,
liquidate, dissolve or reorganize the Company or any of its subsidiaries;

     (b) Admit any additional Members to the Company;

     (c) Acquire substantially all of the assets of, or any equity interest in, any
Person, except for any subsidiary that is substantially wholly-owned;

     (d) Acquire or lease any real property as a location for the Facility and to
serve as the primary business address of the Business;

     (e) Approve the budget for construction of the Facility and procurement of
equipment to be used by the Business;

     (f) Take any action outside the ordinary course of business of the Company, or
change the nature or character (including without limitation through expansion or
contraction) of the Business;

     (g) Issue bonds, debentures, negotiable obligations or other similar
instruments of debt, obtain any loan from any Person (except for trade payables)
including loans from a Member, issue any securities or debt convertible into
securities of the Company, guarantee any obligations of any third parties (other
than Affiliates of the Company in the ordinary course of business) or assign the
assets of the Company in trust for creditors or on the assignee’s promise to pay the
debts of the Company;

     (h) Enter into or approve any transaction between the Company and any of the
Members or their respective Affiliates;

     (i) Approve and amend by-laws pursuant to section 3.3;

     (j) Retain cash in the Company pursuant to section 8.6(d);

     (k) Admit any assignee of a Member’s interest in the Company (other than an
Affiliate) as a substituted Member pursuant to section 9.5;

     (l) Approve the annual Budget for the Company;

     (m) Expend during any Fiscal Year or commit in such Fiscal Year to spend
(whether during that or a future Fiscal Year) any amount for operations or capital
improvements in excess of the aggregate approved expenditures set forth

- 6 -

 

in the Budget, or expend during any Fiscal Year or commit in such Fiscal Year
to spend (whether during that or a future Fiscal Year) more than 110% of the
expenditures set forth in the Budget for such Fiscal Year in any one category or for
any one capital project;

     (n) Commence any litigation, confess a judgment or settle any claim against or
by or on behalf of the Company or submit a claim or liability of the Company to
arbitration;

     (o) Approve the distributions as required by this Agreement and determine or
change the frequency of distributions pursuant to section 8.5;

     (p) Subject to section 7.2, authorize or require contributions to capital in
excess of those listed on Schedule A (prior to any amendment thereof), or approve
the terms of any loan from a Member or its Affiliate, other than loans permitted by
section 16.2(b); and

     (q) Establish all environmental policies and procedures.

     (r) Subject to section 2.1, determine the production levels and related matters
with respect to the Facility;

     (s) Waive an opinion concerning compliance with or exemption from securities
laws pursuant to section 9.2;

     (t) Establish procedures for the establishment of and withdrawal from bank
accounts;

     (u) Appoint or change the auditors for the Company;

     (v) Establish or change the accounting methods used by the Company;

     (w) Select one or more Approved Banks; an “Approved Bank” shall be any bank or
trust company established under the laws of the United States of America or any
state thereof that has a combined capital and surplus and undivided profits (less
any undivided losses) of not less than U.S.$10,000,000,000;

     (x) Hire or fire any Officer; and

     (y) Undertake any of the actions listed in the foregoing clauses (a) — (y)
through or on behalf of a subsidiary of the Company.

     4.6 Appointment of Officers; Delegation of Authority. In connection with the
management of the Business and affairs of the Company, the Executive Committee shall have the
responsibility and authority to hire and fire Officers of the Company and its subsidiaries (which
Officers may be current employees of a Member or their respective Affiliates, and may be “seconded”
or “leased” to the Company or its subsidiaries on a full or part time basis), and

- 7 -

 

delegate to Officers limited power and authority (except with respect to the matters reserved
for decision by the Executive Committee under section 4.5 or elsewhere in this Agreement), to do
all things and on such terms as they, in their reasonable discretion and subject to the terms of
this Agreement, deem necessary or appropriate to conduct the Business and to exercise all powers
and to effectuate the purpose set forth in section 2.1. Without limiting the generality of the
foregoing, the Executive Committee has delegated to the Officers responsibility for, and hereby
mandates that the Officers shall cause the Company to take, the actions set forth in section 5.2

     4.7 Exculpation of Members and Representative. In carrying out their duties
hereunder, the Members and Representatives shall not be liable to the Company or to any other
Member for their good faith actions, or failure to act, or for any errors of judgment, or for any
act or omission believed in good faith to be within the scope of authority conferred by this
Agreement, but only for their own fraud, bad faith, willful misconduct or gross negligence in the
performance of their obligations under this Agreement.

     4.8 Resignation and Removal of Representative; Vacancies.

     (a) Any Representative of the Company may resign at any time by giving written notice
to the Members and the other Representatives. The resignation of any Representative shall
take effect upon receipt of notice thereof or at such later date specified in such notice;
and, unless otherwise specified therein, the acceptance of such resignation shall not be
necessary to make it effective.

     (b) No Representative may be removed except by the Member that appointed him.

     4.9 Tax Elections; Tax Matters Member. The ARI Member will be the “Tax Matters
Member” and shall make and determine all elections with respect to the Internal Revenue Code of
1986, as amended from time to time (the “Code”) and Treasury Regulations (“Treasury Regulations” or
“Treas. Reg.”) issued thereunder. The Tax Matters Member shall be the “tax matters partner” (as
defined in Code Section 6231) and is authorized and required to represent the Company (at the
Company’s expense) in connection with all examinations of the Company’s affairs by tax authorities
and to take all necessary actions in connection therewith, including granting powers of attorney,
and to expend Company funds for professional services and costs associated therewith. The Tax
Matters Member shall provide all notices and perform all acts required of a tax matters partner
under Subchapter C of Chapter 63 of the Code. The Tax Matters Member shall cause the Company to
prepare all income and other tax returns of the Company and all subsidiaries, in accordance with
this Agreement, and shall cause the same to be filed in a timely manner. The Tax Matters Member
shall cause Schedule K-1 to be delivered no later than 90 days after the end of the Fiscal Year.
The Tax Matters Member is authorized to take any action that it determines to be necessary to
comply with the requirements of Code Sections 1441, 1442, 1445 or 1446 with respect to withholding
certain amounts with respect to payments or distributions to a Member who is not a U.S. person (as
defined in Code Section 7701) or withholding of certain amounts with respect to the sale of a
“United States real property interest” (as defined in Code Section 897) or with respect to any
withholding requirements of foreign law applicable to income or distributions from any subsidiary
of the Company.

- 8 -

 

     Notwithstanding anything to the contrary contained herein, the ARI Member, in its capacity as
the Tax Matters Member, shall not take any of the following actions without first obtaining the
prior written consent of the other Members:

     (1) Extend the statute of limitations for assessing or computing any tax
liability against the Company (or the amount or character of any Company tax item);

     (2) Settle any audit with the Internal Revenue Service (“IRS”) concerning the
adjustment or readjustment of any Company tax item;

     (3) File a request for an administrative adjustment with the IRS at any time or
file a petition for judicial review with respect to any IRS adjustment;

     (4) Initiate or settle any judicial review or action concerning the amount or
character of any Company tax item; or

     (5) Take any other action which would have the affect of finally resolving a
tax matter affecting the rights of the Company and its Members.

     The Tax Matters Member shall keep the Members and Representatives advised of any dispute the
Company may have with any federal, state or local taxing authority and shall afford the Members the
right to participate directly in negotiations with any such taxing authority in an effort to
resolve any such dispute.

     Notwithstanding anything to the contrary in this Agreement, at least 30 days before making or
changing any election pursuant to the Code, the Treasury Regulations or any IRS pronouncement, the
Tax Matters Member shall give written notice of such election or change to the ASF Representative
for its consent. In the case of a Transfer by the ASF Member of any or all of its Units to an
Affiliate, the ARI Representative shall have the right to cause the Company to make an election
under Code Section 754.

ARTICLE V

RIGHTS, POWERS AND DUTIES OF OFFICERS

     5.1 Officers. The Company will have such officers as the Executive Committee may from
time to time appoint (the “Officers”) who will be responsible for the daily operations of the
Company, subject to the Budget, the strategic direction established by the Executive Committee and
the authority maintained by the Executive Committee in this Agreement.

     5.2 Rights and Responsibilities of Officers.

     (a) The Officers have the authority for taking, and the Officers shall take, at the
time specified (unless otherwise agreed to by the Executive Committee), the following
actions:

     (i) Obtain and maintain such public liability, hazard and other insurance as
may be deemed necessary or appropriate by the Officers;

- 9 -

 

     (ii) Deposit all funds of the Company in one or more separate bank accounts
with Approved Banks;

     (iii) Maintain at the principal place of business of the Company all of the
records required to be maintained by §18-305 of the Act, which shall be subject to
inspection and copying at the reasonable request and expense of any Member (or its
duly authorized representative) during ordinary business hours;

     (iv) Maintain at the principal place of business of the Company complete and
accurate records of all properties owned or leased by the Company and complete and
accurate books of account (containing such information as shall be necessary to
compute allocations and distributions), and make such records and books of account
available for inspection and copying at the reasonable request and expense of any
Member (or his duly authorized representative) during ordinary business hours;

     (v) By no later than 90 days after the Effective Date (if not already prepared
and submitted), prepare and submit to the Executive Committee a proposed
Construction Budget;

     (vi) By no later than 90 days after the Effective Date (if not already prepared
and submitted) with respect to the current Fiscal Year, and by no later than 75 days
prior to the beginning of each Fiscal Year thereafter, prepare and submit to the
Executive Committee a proposed annual Budget;

     (vii) Within 15 days following the end of each Fiscal Year, use best efforts
(which shall include each Member’s reasonable cooperation in order to allow another
Member to meet its reporting obligations) to cause to be provided to the Members
summary financial information in a format to be determined by the Executive
Committee relating to the operations of the Company for the Fiscal Year just ended,
and in any event cause such information to be provided within 20 days following the
end of each Fiscal Year, and cause to be prepared and provided to the Members within
45 days following the end of each Fiscal Year annual audited consolidated and
consolidating financial statements prepared in accordance with U.S. generally
accepted accounting principles consistently applied, including balance sheets,
statements of operations, and cash flow, for the Fiscal Year just ended;

     (viii) Within 15 days after the end of each month, use best efforts (which
shall include each Member’s reasonable cooperation in order to allow another Member
to meet its reporting obligations) to cause to be provided to each Member unaudited
consolidated and consolidating balance sheets and statements of income, changes in
equity and cash flow statements, all prepared in accordance with U.S. generally
accepted accounting principles consistently applied, for the month just ended, and
in any event cause such materials to be provided within 20 days following the end of
each month;

- 10 -

 

     (ix) By the tenth business day of each month provide to the Representatives a
written report concerning operations for the previous calendar month, in a format to
be agreed upon by the Executive Committee;

     (x) Cause to be filed the Certificate and such other certificates and do such
other acts as may be required by law to qualify and maintain the Company as a
limited liability company under the Act;

     (xi) Cause Schedule A to be amended from time to time as required by this
Agreement, and upon each such amendment designate at the top of such Schedule that
it is an “Amended Schedule A,” and indicate immediately under such designation the
effective date of such amendment;

     (xii) Make any expenditures or other payments (including the execution of
checks) within the terms and as permitted by this Agreement; and

     (xiii) Hire and fire employees of the Company and its subsidiaries (which
employees may be current employees of a Member or their respective Affiliates, and
may be “seconded” or “leased” to the Company or its subsidiaries on a full or part
time basis).

     (b) “Budget” means the separate operating budget and capital budget of the Company for
any Fiscal Year which is, or is deemed to be as provided in this section 5.2(b), in effect,
which Budget shall be in such format and include such detail as specified by the Executive
Committee and will include (on a combined basis and separately with respect to each
Facility) (i) an income statement prepared on an accrual basis which will show in reasonable
detail the revenues (including a detailed sales forecast for railway, mass transit and
industrial, listing both number of units and unit cost) and expenses (including overhead and
administration) projected for the Business for such Fiscal Year, and such things as interest
expense, foreign currency gain or loss, loss on monetary position, current and deferred
income taxes, and employee profit sharing costs, (ii) a cash flow statement which will show
in reasonable detail the receipts and disbursements projected for the Business for such
Fiscal Year and the amount of any corresponding cash deficiency or surplus, (iii) a balance
sheet prepared on an accrual basis projected for the Business as of the end of such Fiscal
Year, (iv) a capital improvements budget projected for the Business for such Fiscal Year,
including for capital projects that will extend beyond the Fiscal Year the total
expenditures for such project and the expenditures during such Fiscal Year; and (v) any
contemplated borrowings for the Business for such Fiscal Year.

     If the Executive Committee does not approve the proposed Budget by 30 days after the
start of the Fiscal Year to which the Budget relates, until such Budget is approved, the
Company shall be operated pursuant to the last Budget approved, with only such increases in
operating expenses as are required under contractual arrangements or beyond the control of
the Company (such as an increase in real estate taxes), and shall make capital expenditures
only with respect to projects approved in a previously

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approved Budget or which are required by law or necessary to assure the health and
safety of the employees.

     (c) “Construction Budget” means the operating and capital budget of the Company for the
construction of the Facility, which shall be in such format and shall include such detail as
shall be specified by the Executive Committee. Such Construction Budget shall include
projections for all expenditures associated with all improvements planned for the initial
purchase and construction of the Facility during the first Fiscal Year, including for
borrowed funds and for any portions of the construction of the Facility which may extend
beyond the first Fiscal Year.

     (d) No Member, Representative or Officer shall take any action contrary to section 4.5
or any policies established thereunder.

     5.3 Salaries. The salaries and other compensation and other terms and conditions of
employment of the Officers of the Company shall be fixed from time to time by the Executive
Committee.

ARTICLE VI

BUY-SELL RIGHTS; CALL RIGHTS

     6.1 Offer to Buy-Sell.

     (a) At any time following the date that is six months after the Effective Date, either
of the ARI Member or the ASF Member (the “Initiating Member”), may at any time deliver to
the other (the “Non-Initiating Member”) an all-cash offer (“Buy-Sell Offer”) in writing
stating the total purchase price and other material terms and conditions on which the
Initiating Member is willing to purchase all (but not less than all) of the Units then owned
by the Non-Initiating Member.

     (b) On receipt of a Buy-Sell Offer, the Non-Initiating Member shall be obligated to
elect to either: (i) sell to the Initiating Member all (but not less than all) of its Units
then owned by the Non-Initiating Member at the purchase price and upon the terms and
conditions set forth in the Buy-Sell Offer; or (ii) purchase all (but not less than all) of
the Units then owned by the Initiating Member at the purchase price and upon the terms and
conditions set forth in the Buy-Sell Offer.

     (c) Notwithstanding the foregoing, the Non-Initiating Member may not make an election
under clause (ii) above if the Non-Initiating Member (a) has filed a voluntary petition
seeking liquidation, reorganization, arrangement or readjustment in any form under Title 11
of the United States Code or any other federal or state insolvency law or (b) is subject to
an involuntary petition under Title 11 of the United States Code.

     (d) The Non-Initiating Member shall give written notice of its election to the
Initiating Member within 60 days after receipt of the Buy-Sell Offer. Failure of the
Non-Initiating Member to give the Initiating Member timely notice of its election shall be
deemed conclusively to be an election under clause (i) above to sell its Units.

- 12 -

 

     (e) The closing of the purchase and sale of Units pursuant to the above procedures
shall occur no later than 60 days following the delivery of the notice of election set forth
above or such earlier date as shall be agreed upon in writing by the Members.

     (f) At the closing, the Member selling its Units (the “Selling Member”), shall sell,
transfer and assign to the Member purchasing such Units (the “Purchasing Member”), all
right, title and interest in and to the Selling Member’s Units and its interest with respect
to the Company, free and clear of all liens, claims and encumbrances, with customary
representations such as due authorization, but without any representation or warranty of any
kind with respect to the Business or the Company. The Selling Member shall also assign
without further consideration, and the Purchasing Member shall accept such assignment, of
all of the Selling Member’s rights and obligations under any supply agreements between the
Company and the Selling Member. The Selling Member shall execute all documents and take
such other actions as may be reasonably necessary or desirable to effectuate the transfer of
the Units and the assignment of the supply agreements and to carry out the purposes of this
provision. The Purchasing Member shall pay for such Units in cash or immediately available
funds, at the direction of the Selling Member.

     6.2 Call Rights.

     (a) Each of the ARI Member and the ASF Member (the “Initial Members”) shall have the
right, at any time, to elect to purchase all (but not less than all) of the Units then owned
by any Member other than an Initial Member (a “New Member”) for an amount of cash equal to
the then Fair Market Value of such Units (the “Call Right”) by delivering a written notice
to such effect to the New Member and the other Initial Member. The date on which such
notice is delivered is referred to as the “Call Exercise Date.”

     (b) Within ten days after the Call Exercise Date, the Initial Member receiving such
notice shall respond by advising the Initial Member delivering such notice whether such
responding Initial Member elects to purchase its pro rata share (based on the number of
Units then owned by both Initial Members) of the Units owned by the New Member. If the
responding Initial Member elects not to purchase its pro rata share of such Units, the
Initial Member exercising the Call Right shall purchase all of the Units owned by the New
Member.

     (c) For purposes of the Call Right, (i) the “Fair Market Value” of each Unit shall be
equal to the quotient of (x) the Company Value divided by (y) the number of outstanding
Units, in each case as of the Call Exercise Date, and (ii) the “Company Value” shall mean
the fair market value of the Company, as of a date not more than 90 days prior to the Call
Exercise Date, as determined by an independent appraiser selected by a majority of the Board
of Directors and approved by the New Member whose Units are being purchased, such approval
not to be unreasonably withheld or delayed.

- 13 -

 

     (d) The closing of the purchase and sale of Units pursuant to the Call Right shall
occur on the later of (i) 60 days following the Call Exercise Date and (ii) 15 days
following receipt of the appraisal referred to in section 6.2(c), or such earlier date as
shall be agreed upon in writing by the Members. Such closing shall be subject to the
provisions of section 6.1(f).

ARTICLE VII

COMPANY CAPITAL; ADVANCES BY MEMBERS

     7.1 Capital Contributions. Each of the Initial Members hereby agrees to contribute to
the capital of the Company the amount set forth opposite its name on Schedule A, on a pro rata
basis in accordance with its relative Percentage Interest, as and when called by the Executive
Committee. The capital contributions listed on Schedule A, together with any additional permitted
contributions to the capital of the Company (the “Capital Contributions”) are credited to the
Members’ Capital Accounts maintained by the Company in accordance with section 8.3.

     7.2 Additional Capital Contributions. Following the contribution of the Capital
Contributions the Members have committed to contribute pursuant to section 7.1, a Member shall be
required to contribute additional capital to the Company equal to its Percentage Interest of any
amounts approved by the Executive Committee, as and when called by the Executive Committee. Each
Member hereby agrees to contribute sufficient capital, on a pro rata basis in accordance with its
relative Percentage Interest, to complete construction of the Facility. Each Member further agrees
that, in the event production at the Facility is curtailed prior to the seventh anniversary of
completion of the Facility (as determined by the Executive Committee), such Member shall contribute
to the Company additional capital, on a pro rata basis in accordance with its relative Percentage
Interest, in order to maintain adequate working capital, provided, however, that any requirement to
make capital contributions exceeding an aggregate for all Members of $12 million in any year will
be subject to approval by the Executive Committee. The requirement of the Members to make
additional capital contributions pursuant to the preceding sentence shall expire on the seventh
anniversary of completion of the Facility (as determined by the Executive Committee), and on such
anniversary, the preceding sentence shall have no further force or effect. Except as provided in
section 7.1 and this section, no Member is permitted or required to make Capital Contributions to
the Company.

     7.3 No Return of Contributions. Anything in this Agreement to the contrary
notwithstanding, the Members will not be personally liable for the return of the Capital
Contribution of a Member, or any portion thereof, it being expressly understood that any such
return shall be made solely from Company assets. A Member may not demand or receive property other
than cash in return for its contribution, except as permitted by section 11.2(c) of this Agreement.
No Member will be entitled to interest on its Capital Contribution.

     7.4 No Partition of Company Property. Each of the Members hereby irrevocably waives
any and all rights, duties, obligations and benefits with respect to any action for partition of
Company property or to compel any sale thereof. Further, all rights, duties, benefits and
obligations, including inventory and appraisal of the Company assets or sale of a Member’s interest
therein, provision for which is made in the Act, or on account of the operation of any

- 14 -

 

other rule or law of any other jurisdiction to compel any sale or appraisal of Company assets
or sale of a Member’s interest therein, are hereby waived and dispensed with.

ARTICLE VIII

FISCAL YEAR; ACCOUNTING; ALLOCATION OF PROFITS AND

LOSSES; DISTRIBUTIONS

     8.1 Fiscal Year. The fiscal year (“Fiscal Year”) of the Company will be the year
ending December 31, unless a different year is required for income tax purposes.

     8.2 Method of Accounting. The Company books will be kept in accordance with U.S.
generally accepted accounting principles, and, subject only to this limitation, as the Executive
Committee determines in accordance with section 4.5(v).

     8.3 Maintenance of Capital Accounts. The Company shall maintain a capital account
(“Capital Account”) for each Member in accordance with Treas. Reg. §1.704-1(b)(2)(iv). The initial
amount credited to the Capital Account of each Member is the amount of such Member’s initial
Capital Contribution. The Capital Account of each Member will also be (a) credited with the amount
of any additional Capital Contributions made by such Member (including any deemed contributions
pursuant to Treas. Reg. §1.704-1(b)(2)(iv)(c)), (b) credited with the amount of any Profits and any
other items of income or gain allocated to such Member, (c) debited by the amount of any Losses and
any other items of loss or deduction allocated to such Member, and (d) debited with the amount of
all actual and deemed distributions made to such Member. Any contribution or distribution of
property in kind will be credited or debited, respectively, in an amount equal to the Carrying
Value of such property, net of liabilities secured by such property or that the Company or a
Member, respectively, is considered to assume or take subject to under Code Section 752. Upon
adjustment to the adjusted tax basis of Company property pursuant to Code Sections 732, 734 or 743,
the Capital Accounts of the Members will be adjusted as provided in Treas. Reg.
§1.704-1(b)(2)(iv)(m). The manner in which Capital Accounts are to be maintained pursuant to this
section is intended to comply with the requirements of Code Section 704(b) and the Treasury
Regulations promulgated thereunder, and the provisions herein regarding maintenance of Capital
Accounts shall be interpreted and applied in a manner consistent with such Regulations. If the Tax
Matters Member reasonably determines that the manner in which Capital Accounts are to be maintained
pursuant to the preceding provisions of this section should be modified in order to comply with
Code Section 704(b) and the Treasury Regulations, then notwithstanding anything to the contrary
contained in the preceding provisions of this section, the method in which Capital Accounts are
maintained shall be so modified; provided, however, that any change in the manner of maintaining
Capital Accounts shall not alter the economic agreement between or among the Members as set forth
in this Agreement.

     8.4 Allocation of Profits and Losses.

     (a) Profits and Losses for each Fiscal Year shall be allocated to the Members in
accordance with the Members’ Percentage Interests. The term “Percentage Interests” means
the percentage interest of any Member in the Company determined by dividing the number of
Units held by such Member by all outstanding Units of Company interest.

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     “Units” is a term used in this Agreement for purposes of making allocations and
determining certain votes; the number of Units allocated to each Member is indicated on
Schedule A. Units do not represent a Member’s interest in the capital of the Company, which
is determined solely by a Member’s Capital Account. Except as required by the Code, taxable
income and loss shall be allocated in accordance with the allocation of Profits and Losses.

     (b) The special allocations set forth in Article XIII shall be made prior to the
allocations under this section.

     (c) “Profits” and “Losses” mean an amount equal to the Company’s taxable income or
loss, respectively, for any period from all sources, determined in accordance with Code
Section 703(a), adjusted in the following manner: (i) the income of the Company that is
exempt from federal income tax or not otherwise taken into account in computing Profits and
Losses pursuant to this definition will be added to such taxable income or loss; (ii) any
expenditures of the Company described in Code Section 705(a)(2)(B) or treated as described
in such Section pursuant to Treas. Reg. §1.704-1(b)(2)(iv)(i) or not otherwise taken into
account in computing Profits or Losses pursuant to this definition will be subtracted from
such taxable income or loss; (iii) in the event the Carrying Value of any Company asset is
adjusted pursuant to section 13.3(b), (c) or (d) hereof, the amount of such adjustment will
be taken into account as gain or loss from the disposition of such asset for purposes of
computing Profits and Losses; (iv) gain or loss resulting from the disposition of an asset
will be computed by reference to the Carrying Value of such asset; (v) a deduction for
Depreciation will be taken in lieu of a deduction for depreciation, amortization or cost
recovery allowable for federal income tax purposes for such Fiscal Year; (vi) to the extent
an adjustment under Code Section 734(b) is required by Treas. Reg. §1.704-1(b)(2)(iv)(m)(4)
to be taken into account in determining Capital Accounts as a result of a distribution other
than in liquidation of a Member’s interest, the amount of such item will be treated as an
item of gain or loss from the disposition of the asset and will be taken into account for
purposes of computing Profits or Losses; and (vii) any items that are specially allocated
pursuant to Article XIII will not be taken into account in computing Profits and Losses.
“Depreciation” means, for each Fiscal Year, an amount equal to the depreciation,
amortization or cost recovery deduction allowable for federal income tax purposes for such
Fiscal Year, unless the Carrying Value for an asset differs from the adjusted basis of such
asset for federal income tax purposes, in which case Depreciation means an amount that bears
the same ratio to the beginning Carrying Value as the depreciation, amortization or cost
recovery deduction bears to the beginning adjusted tax basis, provided, however that if the
adjusted basis of an asset is zero at the beginning of a Fiscal Year, Depreciation will be
determined by the Executive Committee by using any reasonable method.

     8.5 Distribution of Net Cash Flow. Except in connection with the liquidation of the
Company, in which case all distributions shall be made in accordance with Article XI, distributions
of Net Cash Flow will be made with respect to each Fiscal Year on the dates indicated in
subsections (a) and (b) (unless the Executive Committee in its sole discretion otherwise agrees) as
follows:

- 16 -

 

     (a) first, on each April 15, June 15, September 15 and December 15 (or if any
such dates are not a business day, on the next succeeding business day), an amount to each
Member equal to (i) its Percentage Interest multiplied by (ii)(A) the taxable income of the
Company (determined according to the principles of Code Section 6655(e)(2)) multiplied by
(B) 40%, regardless of the actual taxable income allocated to any Member for any Fiscal
Year, or, if less, the Net Cash Flow;

     (b) second, to the ASF Member or the ARI Member, an amount so that the Capital
Accounts of the Members are in proportion to their Percentage Interests.

     (c) thereafter, within 90 days following the end of each Fiscal Year, the
balance to the Members in accordance with their respective Percentage Interests.

     (d) Notwithstanding the foregoing, there will be no distributions as described in
subsection (c) made for the Company’s first Fiscal Year.

     (e) Amounts withheld pursuant to Code Sections 1441, 1442, 1445 or 1446 with respect to
any Member shall be treated as amounts distributed to such Member on the date each such
withholding is made for all purposes of this Agreement and shall be credited against amounts
otherwise distributable to such Member pursuant to this Agreement.

     8.6 Definition of Net Cash Flow. “Net Cash Flow” for a Fiscal Year is computed by
deducting from the sum of the interest income and the EBITDA of the Company as reflected in the
financial statements for such Fiscal Year (or, for purposes of making the distributions in section
8.5(a), may be estimated based on any information available):

     (a) interest and principal payments on indebtedness made in such Fiscal Year;

     (b) all cash expenditures for fixed asset additions, improvements and replacements made
in such Fiscal Year;

     (c) reasonable working capital reserves as may be determined by the Executive
Committee; and

     (d) any other amounts, all relating to such period, that the Executive Committee
determines the Company shall retain for investment in its business.

     8.7 Liability of Member for Return of Distribution. Each Member understands that it
may be liable to the Company for the return of any cash or other property it receives in violation
of §18-607 of the Act. A Member shall not otherwise be personally liable to creditors of the
Company for any debts, obligations, liabilities or losses of the Company, whether arising in
contract, tort or otherwise.

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ARTICLE IX

TRANSFER OF COMPANY INTERESTS

     9.1 No Transfer of Company Interest. Except as specifically provided in this
Agreement, no Member may sell, assign, pledge (except as required by a Member’s debt instruments),
hypothecate or in any manner transfer (together, a “Transfer”) all or any of its Units. Any
Transfer or attempted Transfer by any Member in violation of the preceding sentence shall be null
and void ab initio and of no force or effect whatsoever. Each Member hereby acknowledges the
reasonableness of the restrictions on Transfer imposed by this Agreement in view of the purposes of
this Agreement and the relationship of the Members. Accordingly, the restrictions on Transfer
contained herein shall be specifically enforceable. Each Member hereby further agrees to hold the
Company and each other Member (and each other Member’s successors and permitted assigns) wholly and
completely harmless from any cost, liability or damage (including, without limitation, liabilities
for income taxes and costs of enforcing this indemnity) incurred by any of such indemnified Persons
as a result of a Transfer or an attempted Transfer in violation of this Agreement. For purposes of
this Agreement, a Transfer will be deemed to include the sale, assignment or other transfer of more
than 50% of the voting securities or more than 50% of the total value of securities outstanding of
any Member, provided that this sentence shall not apply to any entity the securities of which are
(or in connection with such transfer become) publicly traded and listed on a recognized national
stock exchange.

     9.2 Compliance with Securities Act of 1933. No Member’s Units have been registered
under the ’33 Act in reliance upon the exemption provided in Section 4(2) of such act.
Notwithstanding any other provisions in this Agreement, no Units of a Member may be offered for
sale, sold, transferred or otherwise disposed of unless, at the expense of the transferring Member,
the Company has received an opinion of counsel for the Company or counsel acceptable to its
counsel, to the effect that such transfer is exempt from registration under the ’33 Act and is in
compliance with all applicable federal and state securities laws and regulations. The Executive
Committee may, in its sole discretion, waive the requirements of this section with respect to the
transfer of any Units, but any such waiver will not constitute a waiver of any subsequent transfer
of such interest or the transfer of any other Units.

     9.3 Transfer of Interest to Affiliates. Any Member may Transfer all or any of its
Units to a Person that, immediately prior to such Transfer, is an Affiliate of such Member,
provided that the level of common ownership between the Member and such Affiliate is greater than
50%.

     9.4 Transfer of Interest of Initial Member. The ARI Member’s interest in the Company
may be transferred to any Person in connection with the sale of the ARI Member or the sale by the
ARI Member of all or substantially all of its business, and the ASF Member’s interest in the
Company may be transferred to any Person in connection with the sale of the ASF Member or the sale
by the ASF Member of all or substantially all of its business. In connection with any such
permitted transfer, each Member and the Company shall provide any necessary consents that may be
required to effectuate the transfer of all applicable properties, agreements and rights relating to
the sale of the ARI Member or the ASF Member, as the case may be, or its business. Upon the
completion of such a sale to a third party, such third party shall be

-18-

 

automatically admitted as a substituted member pursuant to section 9.5 hereto without any
additional consent of any party.

     9.5 Admission of Transferee as Substituted Member. An assignee of a Member’s Units
will not become a substituted Member unless and until the Executive Committee consents in writing
to such substitution, which consent may be arbitrarily withheld, provided that an Affiliate that
receives Units pursuant to section 9.3 or 9.4 or a third party that purchases the ARI Member or the
ASF Member or its respective business as contemplated by section 9.5 shall automatically be
admitted as a substituted Member without further approval or consent. If the Executive Committee
will not consent to the substitution of an assignee of a Member’s interest in the Company, the
transferor Member will have no rights of a Member under the Act. An assignee of a Member’s Units
who is not admitted as a substituted Member under this section may not: (a) require any accounting
of the Company’s transactions; (b) inspect the Company’s books and records; (c) require any
information from the Company; or (d) exercise any privilege or right of a Member which is not
specifically granted to a non-substituted transferee of a limited liability company interest under
the Act.

     9.6 Allocations and Distributions with Respect to Transferred Interests. If any
Transfer of any Units in the Company permitted by this Agreement occurs during a Fiscal Year
(whether or not the transferee is admitted as a substituted Member), then all allocations of
Profits and Losses attributable to the transferred Units for such year will be divided and
allocated between the transferor and the transferee by taking into account their varying interests
during such fiscal period, using any convention or method of allocation selected by the Executive
Committee which is then permitted under Code Section 706 and the regulations promulgated
thereunder. All distributions of Net Cash Flow made prior to the effective date of any such
Transfer will be made to the transferor and any such distributions made after the effective date of
such Transfer will be made to the transferee.

ARTICLE X

WITHDRAWAL, BANKRUPTCY OR LIQUIDATION

OF MEMBERS

     10.1 Withdrawal of Member. A Member may not withdraw from the Company.

     10.2 Bankruptcy, Liquidation of a Member. A Member will not cease to be a Member by
reason of the items listed in §18-304(a)(1) through (6) of the Act. The happening of any such
event will not operate to cause the dissolution of the Company.

     10.3 Bankruptcy of Member. Upon the bankruptcy of a Member and after such time as the
Company has received written notice thereof, the authorized representative of such Member will have
all of the rights of a Member for the purposes of effecting the orderly winding up and disposition
of the affairs of such Person.

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ARTICLE XI

TERMINATION, DISSOLUTION AND LIQUIDATION OF THE

COMPANY

     11.1 Events of Dissolution. Upon the unanimous determination by the Board of
Directors, acting pursuant to section 4.2, that it is no longer profitable, feasible or
advantageous to operate the business of the Company, the Company will be dissolved and liquidated
in accordance with the provisions of this Article XI.

     11.2 Liquidation.

     (a) Upon the dissolution of the Company, the then Members (the “Liquidating Members”),
or the Liquidating Trustee appointed in accordance with section 11.3, shall cause to be made
an accounting of the Company’s assets, liabilities and operations, from the date of the last
previous accounting until the date of dissolution, and shall take any necessary action to
liquidate the Company. The liquidation proceeds will be applied in the following order:

     (i) To creditors in order of priority as provided by law, except for any
indebtedness owing to any Member.

     (ii) To the establishment of any reserves that may be deemed by the Liquidating
Members or the Liquidation Trustee to be reasonably necessary for any contingent or
unforeseen liabilities or obligations of the Company;

     (iii) To the Members in satisfaction of any indebtedness owing to them; and

     (iv) To the Members in accordance with their positive Capital Account balances.

     (b) Upon liquidation of the Company, no Member will be required to contribute any
amount to the Company solely because of a deficit balance in its Capital Account and any
such deficit balance will not for any purpose be considered an asset of the Company.

     (c) For purposes of the liquidation of the Company assets, the discharge of its
liabilities and the distributions of the remaining funds among the Members as above
described, the Liquidating Members or Liquidating Trustee may on behalf of the Company sell,
convey, exchange or otherwise transfer the assets of the Company for such consideration and
upon such terms and conditions as it deems appropriate. The Liquidating Members or the
Liquidating Trustee, in its sole discretion, may make distributions in kind to Members. A
reasonable time will be allowed for the orderly liquidation of the assets of the Company and
the discharge of liabilities of the Company to creditors to enable the Company to minimize
normal losses during a liquidation period.

     11.3 Election of Liquidating Trustee. The Liquidating Members may elect, by a
unanimous vote, one of the Representatives or any other Person of their choice to act as

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liquidating trustee (the “Liquidating Trustee”) in the liquidation of the Company business in
accordance with the provisions of this Article.

     11.4 Statements. The Company’s auditor shall furnish each of the Members with a
statement setting forth the assets and liabilities of the Company as of the date of complete
liquidation. When the Liquidating Members or the Liquidating Trustee has complied with the
distribution plan set forth in this Article XI, the Liquidating Members or the Liquidating Trustee,
as the case may be, shall execute and cause to be filed a certificate of dissolution of the
Company.

ARTICLE XII

AMENDMENT OF THE AGREEMENT

     12.1 Ordinary Course Amendments. This Agreement may be amended by the Executive
Committee provided that such amendment is:

     (a) For the purpose of amending Schedule A in order to recognize the substitution or
deletion of a Member in accordance with the provisions of this Agreement;

     (b) For the purpose of reflecting a change in the amount or character of the Capital
Contribution of any Member; or

     (c) In the opinion of counsel for the Company, necessary or appropriate to satisfy
current requirements of the Code with respect to partnerships or any federal or state
securities laws or regulations.

Any amendment made pursuant to subsection (c) may be made effective as of the date of this
Agreement. All Members must be notified as to the substance of any amendment to this Agreement and
upon request will be furnished a copy thereof.

     12.2 Other Amendments. All other amendments to this Agreement require the written
approval of all Members.

ARTICLE XIII

TAX PROVISIONS

     The following provisions apply for all purposes of this Agreement:

     13.1 Allocations Required by Treasury Regulations.

     (a) Subject to the exceptions set forth in Treas. Reg. §§1.704-2(f)(2)-(5), if there is
a net decrease in Minimum Gain during any Fiscal Year, each Member shall be specially
allocated items of Company income and gain for such year (and, if necessary, subsequent
years) in an amount equal to such Member’s share of the net decrease in Minimum Gain,
determined in accordance with Treas. Reg. §1.704-2(g)(2). “Minimum Gain” shall have the
meaning set forth in Treas. Reg. §§1.704-2(b)(2) and 1.704-2(d).

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This paragraph is intended to comply with the minimum gain chargeback requirement in
Treas. Reg. §§1.704-2(b)(2) and (f) and shall be interpreted consistently therewith.

     (b) Subject to the exceptions set forth in Treas. Reg. §1.704-2(i)(4), if there is a
net decrease in Member Nonrecourse Debt Minimum Gain during any Fiscal Year of the Company,
each Member who has a share of the Member Nonrecourse Debt Minimum Gain, determined in
accordance with Treas. Reg. §1.704-2(i)(3), shall be specially allocated items of Company
income and gain for such year (and, if necessary, subsequent years) in an amount equal to
such Member’s share of the net decrease in Member Nonrecourse Debt Minimum Gain, determined
in accordance with Treas. Reg. §1.704-2(i)(5). This paragraph is intended to comply with
the minimum gain chargeback requirement in Treas. Reg. §1.704-2(i)(4) and shall be
interpreted consistently therewith. “Member Nonrecourse Debt Minimum Gain” means an amount,
with respect to each Member Nonrecourse Debt, determined in accordance with Treas. Reg.
§1.704-2(i) with respect to “partner nonrecourse debt minimum gain.” “Member Nonrecourse
Debt” shall have the meaning set forth in Treas. Reg. §1.704-2(b)(4) for “partner
nonrecourse debt.”

     (c) In the event any Member unexpectedly receives any adjustments, allocations or
distributions described in Treas. Reg. §1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of
Company income and gain shall be specially allocated to such Member in an amount and manner
sufficient to eliminate the deficits in its Adjusted Capital Account Balance created by such
adjustments, allocations or distributions as quickly as possible. This paragraph is
intended to constitute a “qualified income offset” within the meaning of Treas. Reg.
§1.704-1(b)(2)(ii)(d), and shall be interpreted consistently therewith. “Adjusted Capital
Account Balance” means the balance in the Capital Account of a Member as of the end of the
relevant Fiscal Year of the Company, after giving effect to the following: (i) credit to
such Capital Account any amounts the Member is obligated to restore, pursuant to the terms
of this Agreement or otherwise, or is deemed obligated to restore pursuant to the
penultimate sentences of Treas. Reg. §§1.704-2(g)(1) and 1.704-2(i)(5), and (ii) debit to
such capital account the items described in Treas. Reg. §§1.704-1(b)(2)(ii)(d)(4), (5) and
(6). The allocations set forth in this section 13.1(c) are intended to comply with certain
requirements of Treasury Regulations promulgated under Code Section 704. Such allocations
shall be taken into account in allocating other Profits, Losses, and items of income, gain,
loss and deduction to each Member so that, to the extent possible, and to the extent
permitted by Treasury Regulations, the net amount of such allocations of other Profits,
Losses and other items and such allocations to each Member shall be equal to the net amount
that would have been allocated to each Member if such allocations had not been made.

     (d) Nonrecourse Deductions for any Fiscal Year or other period shall be specially
allocated to the Members in accordance with their Percentage Interests. “Nonrecourse
Deductions” shall have the meaning set forth in Treas. Reg. §1.704-2(b)(1). The amount of
Nonrecourse Deductions for a Fiscal Year of the Company equals the excess, if any, of the
net increase, if any, in the amount of Minimum Gain during that Fiscal Year over the
aggregate amount of any distributions during that Fiscal Year of proceeds of a Nonrecourse
Liability that are allocable to an increase in Minimum

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Gain, determined according to the provisions of Treas. Reg. §1.704-2(c). “Nonrecourse
Liability” shall have the meaning set forth in Treas. Reg. §1.704-2(b)(3).

     (e) Member Nonrecourse Deductions for any Fiscal Year or other period shall be
specially allocated to the Member who bears the economic risk of loss with respect to the
Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in
accordance with Treas. Reg. §1.704-2(i). “Member Nonrecourse Deductions” shall have the
meaning set forth in Treas. Reg. §1.704-2(i)(2) for “partner nonrecourse deductions.” For
any Company taxable year, the amount of Member Nonrecourse Deductions with respect to a
Member Nonrecourse Debt equals the net increase during the year, if any, in the amount of
Member Nonrecourse Debt Minimum Gain reduced (but not below zero) by proceeds of the
liability that are both attributable to the liability and allocable to an increase in the
Member Nonrecourse Debt Minimum Gain.

     13.2 Rules of Application.

     (a) Profits and Losses and other items of income, gain, loss and deduction shall be
allocated to the Members in accordance with the portion of the year during which the Members
have held their respective interests. All items of income, loss and deduction shall be
considered to have been earned ratably over the period of the Fiscal Year of the Company,
except that (i) gains and losses arising from the disposition of assets shall be taken into
account as of the date thereof, and (ii) with the consent of the Executive Committee and all
affected parties, the preceding items may be allocated by using an “interim closing of the
books” method.

     (b) To the extent any payments in the nature of fees paid to a Member are finally
determined to be distributions to a Member for federal income tax purposes, there will be a
gross income allocation to such Member in the amount of such distribution.

     (c) Losses may not be allocated to any Member to the extent that such allocation would
result in a deficit in its Adjusted Capital Account Balance while any other Member continues
to have a positive Adjusted Capital Account Balance; in such event Losses will first be
allocated to Members with positive Adjusted Capital Account Balances in proportion to such
balances, until their positive Adjusted Capital Account Balances have been reduced to zero.
To the extent that any Losses are allocated pursuant to this paragraph, Profits will
thereafter be allocated in reverse order of such allocations of Losses to the extent of such
Losses.

     (d) The allocation of Profits and Losses to any Member shall be deemed to be an
allocation to that Member of the same proportionate part of each separate item of taxable
income, gain, loss, deduction or credit that comprises such Profits and Losses.

     (e) To the extent a Member is imputed income for federal income tax purposes (including
as a result of services provided pursuant to section 13.1, there will be a gross deduction
allocation to such Member in the amount of such imputed income.

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     13.3 Rules Concerning Calculations of Profits and Losses and Code Section 704(c) Tax
Allocations.

     (a) For purposes of computing Profits and Losses, “Carrying Value” means (i) with
respect to contributed property, the agreed value of such property reduced (but not below
zero) by Depreciation, (ii) with respect to property the book value of which is adjusted
pursuant to Treas. Reg. §§1.704-1(b)(2)(iv)(d), (e) or (f), the amount determined pursuant
to sections 13.3(d) or (e), and (iii) with respect to any other property, the adjusted basis
of such property for federal income tax purposes as of the time of determination.

     (b) Upon the occurrence of any of the following events, the Carrying Value of Company
property will be adjusted to its fair market value, as determined by the Executive
Committee:

     (i) The acquisition of an interest in the Company by a new or existing Member
in exchange for more than a de minimis contribution of money or property;

     (ii) The distribution by the Company to a continuing or retiring Member of more
than a de minimis amount of property or money in consideration for an interest in
the Company; or

     (iii) The “liquidation” of the Company within the meaning of Treas. Reg.
§1.704-1(b)(2)(ii)(g).

The revaluation of the Company property referred to in the immediately preceding sentence
shall be made in accordance with Treas. Reg. §1.704-1(b)(2)(iv)(f).

     (c) Upon an issuance of additional interests in the Company for cash or contributed
property, the Carrying Value of all Company properties will, immediately prior to issuance,
be adjusted (consistent with the provisions hereof) upward or downward to reflect any
unrealized gain or unrealized loss attributable to each Company property (as if such
unrealized gain or unrealized loss had been recognized upon an actual sale of such property
at the fair market value thereof immediately prior to such issuance, and had been allocated
to the Members, at such time, pursuant to section 8.4 of the Agreement). In determining
such unrealized gain or unrealized loss attributable to the properties, the fair market
value of Company properties will be determined by the Executive Committee using such
reasonable methods of valuation as it may adopt.

     (d) Immediately prior to the distribution of any Company property in liquidation of the
Company or in redemption of all or part of any Member’s interest in the Company, the
Carrying Values of all Company properties will be adjusted (consistent with the provisions
hereof) upward or downward to reflect any unrealized gain or unrealized loss attributable to
each Company property (as if such unrealized gain or unrealized loss had been recognized
upon an actual sale of each such property, immediately prior to such distribution, and had
been allocated to the Members, at such

-24-

 

time, pursuant to section 8.4 of the Agreement). In determining such unrealized gain
or unrealized loss attributable to the properties, the fair market value of Company
properties will be determined by the Executive Committee using such reasonable methods of
valuation as it may adopt.

     (e) In accordance with Code Section 704(c) and the regulations thereunder, income,
gain, loss and deduction with respect to any contributed property will, solely for tax
purposes, be allocated among the Members so as to take account of any variation between the
adjusted basis of such property to the Company for federal income tax purposes and its
agreed value, pursuant to any method permitted by the regulations and chosen by the
Executive Committee.

     (f) In the event the Carrying Value of any Company asset is adjusted as described in
paragraph (c) or (d) above, subsequent allocations of income, gain, loss and deduction with
respect to such asset will take account of any variation between the adjusted basis of such
asset for federal income tax purposes and its Carrying Value in the same manner as under
Code Section 704(c) and the regulations thereunder.

     (g) A transferee of a Company interest will succeed to the Capital Account relating to
the Company interest transferred.

ARTICLE XIV

ADDITIONAL COVENANTS; OTHER AGREEMENTS

     14.1 Confidentiality; Trade Secrets; Use of Names, Etc. Subject to the requirements
of applicable law, each Member shall maintain (and shall cause the Representative appointed by it
and the Officers to maintain) in confidence the terms of this Agreement and all confidential
information specified below or otherwise identified as such received from the other or the Company,
whether of a commercial or technical nature, shall use such information only for the benefit of the
Company, and shall not disclose any such information to a third party (other than such Member’s
officers, directors, shareholders, members, managers, trustees, partners and professional advisers
who agree or are bound to keep such information confidential) or make any unauthorized use thereof.
Each Member shall treat such information with the same degree of care against disclosure or
unauthorized use which it affords to its own confidential information. The obligation of
confidential treatment shall not apply to any information that (i) has become generally available
in the public domain, (ii) was in the receiving Member’s possession prior to disclosure, unless
such information was first received by the receiving Member from the other Member as a part of the
negotiation of this Agreement, (iii) was independently developed by the receiving Member, (iv) was
received from a third party who had a right to disclose such information, or (v) is required to be
disclosed to comply with applicable laws, rules, regulations or court orders.

     14.2 Supply Agreement. As a condition to the making of any Capital Contribution by
any Member, each of the Members shall enter into a supply agreement with the Company substantially
in the form of Exhibit A attached hereto. It shall be a condition to the admission of any
additional Members pursuant to section 3.1 hereto or otherwise that such new Members also enter
into a supply agreement in substantially the same form as is attached on Exhibit A.

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     14.3 Marketing Agreement. As a condition to the making of any Capital Contribution by
the ASF Member, the Company shall enter into a marketing agreement with the ASF Member
substantially in the form of Exhibit B attached hereto.

     14.4 Press Release. No press releases or similar publications announcing the
establishment of this joint venture will be made by or on behalf of the Company without the prior
approval of each Member.

ARTICLE XV

INDEMNIFICATION

     15.1 Indemnification as to Actions or Omissions in Company’s Business. Except to the
extent otherwise provided in this Agreement, the Company shall indemnify, defend and hold harmless
and will advance expenses to, the Members and Representatives, Officers, employees and agents
(collectively, “Indemnitees”) from and against any loss, claim, liability, damage, expense
(including legal fees and expenses), demands, actions, suits or proceedings, civil, criminal,
environmental, administrative or investigative (together, “Claims”) incurred or suffered by any
such Indemnitee with respect to any third—party claim by reason of any act performed or omitted to
be performed, or alleged to have been performed or omitted by such Indemnitees pursuant to this
Agreement in connection with the Business of the Company; provided that, such Indemnitee may not
receive indemnification hereunder with respect to any Claim as to which the Indemnitee is adjudged
by a final nonappealable decision of a court of competent jurisdiction to have acted in or with
fraud, bad faith, gross negligence, willful misconduct or breach of this Agreement. Any such
indemnification will be made promptly following the fixing of the loss, liability or damage
incurred or suffered by final nonappealable decision, settlement, contract or otherwise (except
that any attorneys’ fees and the expenses of defense may be paid as incurred). In no event will
any Member be required to make an additional Capital Contribution to carry out this
indemnification.

     15.2 Cross Indemnification. Each Member (the “Breaching Member”) shall indemnify,
defend and hold harmless the other Members and their Affiliates, as the case may be, from and
against any Claims incurred or suffered by the other Members and/or such Affiliates, as a result of
any action, claim, demand or proceeding commenced by any Person due to the breach of this Agreement
by the Breaching Member or any of its Affiliates, or by the Breaching Member’s gross negligence or
willful misconduct in the performance of its obligations under this Agreement, provided however,
that this indemnity obligation shall not apply in regard to a breach by the Breaching Member or any
of its Affiliates of those obligations under this Agreement which breach carries a specific remedy
under this Agreement, which remedy shall be the other Members’ exclusive remedy for the breach by
the Breaching Member or its Affiliate of such obligations.

     15.3 Procedure for Indemnification.

     (a) Each Indemnitee pursuant to section 15.1 shall give prompt written notice to the
Company of any potential Claim or event known to it which does or may give rise to
indemnification hereunder, stating the nature and basis of said potential Claim or event and
the amounts thereof, to the extent known. A Member or Affiliate thereof entitled to

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indemnification pursuant to section 15.2 shall give a similar notice to the other
Members. Notwithstanding the foregoing, failure to give prompt written notice pursuant to
this section shall not cause an Indemnitee or Member to lose its rights to indemnification
hereunder except to the extent that the Company or the other Member can establish that it
has been harmed by such delay.

     (b) In the event of any Claim, the Indemnitee shall give the Company written notice of
such Claim, with a copy of the Claim, process and legal pleadings with respect thereto.
After notification, the Company may participate in and assume the defense thereof, with
counsel selected by it. If the Company assumes the defense of the Claim, the Indemnitee
shall nonetheless have the right to employ its own counsel, and such counsel may participate
in such action, but the fees and expenses of such counsel shall be at the expense of the
Indemnitee. Similar procedures shall apply with respect to any claim under section 15.2.

     (c) As a condition to the receipt of any indemnification payment hereunder, the
Indemnitee shall provide a complete and absolute release with respect to the subject matter
of the indemnification to the Company and the other Members.

     15.4 Survival. The provisions of this Article shall survive dissolution and
liquidation of the Company and shall survive termination of this Agreement for any reason for a
period of ten years.

ARTICLE XVI

DEFAULT AND REMEDIES

     16.1 Defaults. The following events shall constitute a default under this Agreement:

     (a) the failure to make any Capital Contribution when required; and

     (b) the breach of any other material provision of this Agreement if not cured within 30
days following receipt of a written notice describing such default from an Officer or any
other Member.

     16.2 Remedies. Upon the happening of any event of default listed in section 16.1, the
Company or any Member on behalf of the Company may initiate one or more of the following remedies:

     (a) sue for damages or seek any other remedy available in any appropriate court of law
or equity; or

     (b) if the event of default is described in section 16.1(a), the Representatives of the
non-defaulting Members shall thereafter be entitled to take the actions listed in section
4.5 as if consent of the defaulting Member’s Representative had been given, and the other
Members may, at their option, (i) loan such funds to the Company at an interest rate equal
to the prime lending rate of JPMorgan Chase Bank, N.A., in Chicago, Illinois, plus five
percentage points, as in effect as of the first business day of each month, or (ii)
contribute such funds to the Company as an additional Capital Contribution, in which

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case the number of additional Units issued to the non-defaulting Members shall be twice
the number that would otherwise be issued with respect to the amount of the additional
Capital Contribution.

ARTICLE XVII

MISCELLANEOUS

     17.1 Notices. Any and all notices or other communications shall be sent to any Member
at the address listed in Schedule A, unless the Company and the other Member is notified in writing
of any change of address. Notices or other communications will be deemed to have been given only
when hand delivered, sent by facsimile or e-mail with receipt confirmed by telephone, or sent by
recognized overnight delivery service.

     17.2 Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware.

     17.3 Business Practices. Each Member, Representative, Officer and the Company (for
itself and any subsidiaries) in the performance of their obligations and in the conduct of the
Business shall comply in all material respects with all relevant laws and regulations (including
licensing requirements and requirements for government approvals) of the United States of America,
and of any country in which the Company or a subsidiary does business. Each of the Members shall
cooperate with the other and with the Company in meeting this obligation. In no event will any
Member, Representative, Officer or the Company or its subsidiaries be obligated under this
Agreement to take any action or omit to take any action that any such person believes, in good
faith, would cause him or it, or its stockholders, members, partners, managers, directors,
officers, employees, agents or Representative, to be in violation of any applicable laws or
regulations including, without limitation, the U.S. Foreign Corrupt Practices Act, as amended.

     17.4 Counterparts. This Agreement may be executed in multiple counterparts, each of
which shall be deemed an original and all of which constitute one agreement, notwithstanding that
not all of the parties are signatories to the original or the same counterpart, or that signature
pages from different counterparts are combined, and the signature of any party to any counterpart
shall be deemed to be a signature to and may be appended to any other counterpart.

     17.5 Language Conventions; Captions. Words of any gender used in this Agreement
include any other gender, and words of the singular number include the plural (and vice-versa),
when the sense requires. The captions to each Article and section are inserted only as a matter of
convenience and for reference only and in no way define, limit or describe the scope or intent of
this Agreement or in any way affect it.

     17.6 Entire Agreement. This Agreement contains the entire understanding among the
parties and supersedes any prior understanding and agreements between them respecting the subject
matter hereof. There are no representations, agreements, arrangements or understandings, oral or
written, between and among the parties hereto relating to the subject matter of this Agreement
which are not described herein.

     17.7 Provisions Severable. This Agreement is intended to be performed in accordance
with and only to the extent permitted by, all applicable laws, ordinances, rules and regulations of

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the jurisdictions in which the Company does business. If any provision of this Agreement, or
the application thereof to any person or entity or circumstance, is for any reason and to any
extent invalid or unenforceable, such provision shall be enforced to the greatest extent permitted
by law in the applicable jurisdiction or circumstance and the remainder of this Agreement and the
application of such provision to other persons or entities or circumstances shall not be affected
thereby, but rather shall be enforced to the greatest extent permitted by law.

     17.8 Binding Agreement. This Agreement shall be binding upon and shall inure to the
benefit of all Members and their respective legal representatives, heirs, permitted successors and
permitted assigns.

     17.9 Further Action. Each Member agrees to perform all further acts and execute,
acknowledge and deliver any documents which may be reasonably necessary, appropriate or desirable
to carry out the provisions of this Agreement.

     17.10 Waivers. The failure of any party to seek redress for violation of or to insist
upon the strict performance of any covenant or condition of this Agreement shall not prevent a
subsequent act, which would have originally constituted a violation, from having the effect of an
original violation.

[no additional text on this page]

-29-

 

     IN WITNESS WHEREOF, the parties have entered into this Agreement and have hereunto set their
hands to multiple copies hereof to be effective as provided in section 1.2.

	 	 	 	 	 
	 	 	ARI MEMBER:
	 
	 	 	 	 
	 	 	ARI COMPONENT VENTURE LLC
	 
	 	 	 	 
	 

	 	By:
	 	/s/ James J. Unger
	 

	 	 	 	 
	 

	 	Name:
	 	James J. Unger
	 

	 	Title:
	 	President
	 
	 	 	 	 
	 	 	ASF MEMBER:
	 
	 	 	 	 
	 	 	ASF-KEYSTONE, INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ John Wories Jr.
	 

	 	 	 	 
	 

	 	Name:
	 	John Wories, Jr.
	 

	 	Title:
	 	President

As to the guarantee obligations in section 3.1:

	 	 	 	 	 
	 	 	AMERICAN RAILCAR INDUSTRIES, INC.
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:
	 	/s/ James J. Unger
	 

	 	 	 	 
	 

	 	Name:
	 	James J. Unger
	 

	 	Title:
	 	President
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	AMSTED INDUSTRIES INCORPORATED
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:
	 	/s/ MJ Hower
	 

	 	 	 	 
	 

	 	Name:
	 	MJ Hower
	 

	 	Title:
	 	Vice President — Treasurer

-30-

 

APPENDIX A

     The capitalized terms used in the body of this Agreement have the meanings set forth below or
in the provision referenced below, where such term appears in boldface print. Defined terms used
in only one section of the Agreement may not be listed below.

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

“ARI Member” is defined in section 3.1.

“Act” is defined in the preamble.

“Adjusted Capital Account Balance” is defined in section 13.1(c).

“Affiliate” means (i) any Person that controls, is controlled by, or is under common control
with, any Member, directly or indirectly; and (ii) any Person that controls, is controlled
by, or is under common control with, and Person identified by clause (i). For purposes of
this definition, “control” shall be defined as in the Securities Act of 1933, and no Member
shall be deemed to be an Affiliate of any other Member.

“Agreement” is defined in the preamble.

“Approved Bank” is defined in section 4.3(w).

“ASF Member” is defined in section 3.1.

“ASF Representative” is defined in section 4.3(a).

“Breaching Member” is defined in section 15.2.

“Budget” is defined in section 5.2(b).

“Business” is defined in section 2.1.

“Buy-Sell Offer” is defined in section 6.1.

“Call Exercise Date” is defined in section 6.2(a).

“Call Right” is defined in section 6.2(a).

“Capital Account” is defined in section 8.3.

“Carrying Value” is defined in section 13.3(a).

“Capital Contributions” is defined in section 7.1.

“Certificate” is defined in section 1.6.

“Claims” is defined in section 15.1.

App-1 

 

“Code” is defined in section 4.7.

“Company” is defined in section 1.1. References to the Company will be deemed to include
its subsidiaries unless the context clearly requires otherwise. References to the “Company
and its subsidiaries” in some places is not intended to exclude subsidiaries from references
to the “Company” alone.

“Company Value” is defined in section 6.2(c).

“Construction Budget” is defined in Section 5.2(c).

“Depreciation” is defined in section 8.4(c).

“Effective Date” is defined in section 1.2.

“Executive Committee” is defined in section 4.1(a).

“Facility” is defined in section 2.1.

“Fair Market Value” is defined in section 6.2(c).

“Fiscal Year” is defined in section 8.1, and, where the context requires, shall include a
portion of a Fiscal Year.

“Indemnitees” is defined in section 15.1.

“Initial Member” is defined in section 6.2(a).

“Initiating Member” is defined in section 6.1.

“IRS” is defined in section 4.9.

“Liquidating Member” is defined in section 11.2(a).

“Liquidating Trustee” is defined in section 11.3.

“Losses” is defined in section 8.4(c).

“Member Nonrecourse Debt” is defined in section 13.1(b).

“Member Nonrecourse Debt Minimum Gain” is defined in section 13.1(b).

“Member Nonrecourse Deductions” is defined in section 13.1(e).

“Members” is defined in section 3.1.

“Minimum Gain” is defined in section 13.1(a).

“Net Cash Flow” is defined in section 8.6.

App-2 

 

“New Member” is defined in section 6.2(a).

“Non-Initiating Member” is defined in section 6.1.

“Nonrecourse Deductions” is defined in section 13.1(d).

“Nonrecourse Liability” is defined in section 13.1(d).

“Officers” is defined in section 5.1.

“Percentage Interests” is defined in section 8.4(a).

“Person” means an individual, partnership, corporation, association, joint stock company,
trust, joint venture, limited liability company, unincorporated organization, or any similar
entity organized under foreign law.

“Profits” is defined in section 8.4(c).

“Property” is defined in section 2.1.

“Purchasing Member” is defined in section 6.1.

“Remaining Capital Commitment” means the sum of the Capital Contributions of the ARI Member
and the ASF as listed on Schedule A, as such amounts may be increased from time to time in
the sole discretion of the ARI Member and the ASF Member, less amounts previously
contributed by the ARI Member and the ASF Member pursuant to section 7.1.

“Representative” is defined in section 4.3

“Selling Member” is defined in section 6.1.

“Tax Matters Member” is defined in section 4.9.

“Transfer” is defined in section 9.1.

“Treasury Regulations” and “Treas. Reg.” are defined in section 4.9.

“Units” is defined in section 8.4(a).

App-3exv10w1

 

Exhibit 10.1

EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (the “Agreement” or the “Employment Agreement”) is by and among
Neenah Foundry Company, a Wisconsin corporation (“Employer”), ACP Holding Company, a Delaware
corporation (“ACP”), and William M. Barrett (“Executive”).

WITNESSETH:

     WHEREAS, Executive has been a valuable executive of the Employer for many years;

     WHEREAS, Executive, who has been serving as Employer’s President and Chief Executive Officer,
wishes to have a reduced role with the Employer, and Employer and Executive have agreed that
Executive will have a reduced role with the Employer and ACP following the employment by the
Employer of a new President and Chief Executive Officer;

     WHEREAS, Executive, who will remain Chairman of the Board, has been designated as Executive
Chairman of Employer and ACP as of the Effective Date (as defined in Article IV hereof); and

     WHEREAS, the Employer and Executive desire to enter into this Employment Agreement to replace
the Executive’s Prior Employment Agreement.

     NOW, THEREFORE, intending to be legally bound, Employer agrees to employ Executive, and
Executive hereby agrees to be employed by Employer, upon the following terms and conditions as of
the Effective Date:

ARTICLE I
EMPLOYMENT

     1.01 Position. Employer hereby agrees to employ Executive as Employer’s Executive
Chairman and Executive hereby agrees to such employment. Executive will devote up to 35% of the
time that a full time executive officer of the Employer would devote to the business and affairs of
the Company Group during the first four months following the Effective Date and will, for the
remainder of the Employment Period, devote up to 25% of the time that a full time executive officer
of the Employer would devote to the business and affairs of the Company Group. Employer and
Executive acknowledge that there will be periods of more concentrated time required of Executive
and periods of less concentrated time. The performance of Executive’s duties shall be under the
supervision and direction of the board of directors of Employer (the “Board”), or its designated
representative. So long as Executive continues to be employed by Employer in the foregoing
capacity, he shall also serve as Executive Chairman of ACP and as a member of the boards of
directors of ACP and each of its Subsidiaries and any committee thereof to which Executive is
appointed.

     1.02 Term. The term of this Agreement shall be the period from the Effective Date
until the date on which the Employer or the Executive terminates this Agreement (the period

 

 

from the Effective Date until the termination of the Agreement shall be referred to herein as
the “Employment Period”). The Employer or the Executive may terminate the Employment Period at any
time after the first anniversary of the Effective Date on thirty (30) days prior written notice.
The Employer may also terminate the Employment Period at any time for Cause.

     1.03 Compensation. During the Employment Period, Executive will receive a salary of
$200,000 per year (the “Salary”). The Salary shall be paid by Employer in regular installments in
accordance with Employer’s general payroll practices (as in effect from time to time) and shall be
subject to customary withholding. Executive shall not receive fees for service on the Board during
the Employment Period. Executive shall not be entitled to receive an annual bonus except as
otherwise determined by the Board.

     1.04 Executive Benefits. During the Employment Period, the coverages and benefits
provided to Executive pursuant to employee benefit plans, policies, programs or arrangements
maintained by Employer or any other member of the Company Group shall be, in the aggregate, no less
favorable than those provided to Executive immediately prior to the Effective Date. The Executive
may continue to use the company car currently provided to Executive, and the car shall be
transferred, at no charge, to the Executive at the end of the Employment Period unless the
Executive is terminated for Cause.

     1.05 Reimbursement. Employer shall reimburse Executive for all reasonable expenses
incurred by Executive in the course of performing Executive’s duties under this Agreement that are
consistent with the policies of Employer in effect from time to time with respect to travel,
entertainment and other business expenses, subject to the requirements of Employer with respect to
reporting and documentation of such expenses. As the immediate past president of the Foundry
Educational Foundation, Executive and his wife will be reimbursed during the Employment Period for
reasonable travel expenses incurred in connection with the Chicago and Waupaca meetings of the
Foundry Educational Foundation.

     1.06 Severance. If the Employment Period is terminated by the Employer other than for
Cause prior to the first anniversary of the Effective Date, Executive shall continue to receive the
Salary, the executive benefits described in Section 1.04, and any incentive payment pursuant to
Section 1.07 below that Executive would have received had he remained employed through the first
anniversary of the Effective Date. If Executive is terminated after the first anniversary of the
Effective Date, Executive shall receive no severance benefits. If Executive is terminated for
Cause at any time, Executive will receive no Salary, executive benefits, or other severance
payments after such termination. Executive shall not, under any circumstances, be entitled to any
benefits pursuant to the Employer’s 2003 Severance and Change of Control Plan.

     1.07 Annual Incentive Plan. Executive will participate in the Employer’s 2003
Management Annual Incentive Plan (the “Annual Incentive Plan”) for fiscal year ended September 30,
2007 but shall not participate for any subsequent fiscal year.

     1.08 Equity Incentive Plan. Executive shall not be entitled to any additional awards
under the Employer’s 2003 Management Equity Incentive Plan (the “Equity Incentive Plan”).
Executive hereby acknowledges and agrees that the shares of ACP common stock he received pursuant
to the Equity Incentive Plan under his Prior Employment Agreement and still owns

2

 

have not been registered pursuant to the Securities Act or the securities laws of any state
and may not be sold or transferred in the absence of an effective registration statement or an
exemption from registration thereunder.

ARTICLE II
CONFIDENTIALITY PROVISIONS

     2.01 Confidential Information. Executive acknowledges that the information and data
obtained by Executive during his relationship with Employer concerning the business or affairs of
Employer (“Confidential Information”) are the property of Employer. Therefore, Executive agrees
that, except as required by law or court order, Executive shall not disclose to any unauthorized
person or use for Executive’s own account any Confidential Information without the prior written
consent of the Board, unless and to the extent that the aforementioned matters become generally
known to and available for use by the public other than as a result of Executive’s acts or
omissions to act. Executive shall deliver to Employer upon Executive’s resignation as an employee
of Employer or removal from such position, or at any other time Employer may request, all
memoranda, notes, plans, records, reports, computer tapes and software and other documents and data
(and copies thereof) relating to the Confidential Information and the business of the Company Group
that Executive may then possess or have under Executive’s control.

ARTICLE III
COVENANTS OF THE EXECUTIVE

     3.01 Duties. Executive agrees to be a loyal employee of the Employer. Executive
agrees to devote his best efforts to the performance of his duties for Employer, and to give proper
time and attention to furthering Employer’s business. Executive’s duties shall include (a)
completing an orderly and seamless transition of Robert E. Ostendorf, Jr., as President and Chief
Executive Officer, including (i) regular visits to Employer’s headquarter in Neenah, Wisconsin as
determined jointly with the Chief Executive Officer; (ii) availability for telephone consultation
at any time; and (iii) direct involvement in the preparation of agenda and supporting material for
the July 2007 Board meeting; (b) participating (as directed by the Chief Executive Officer) in the
preparation of the 2008 business plan (begins in July 2007, concludes at the October 2007 Board
meeting); (c) monitoring and assessing the status and overseeing the progress of the new mold line
and working with the Chief Executive Officer to ensure the commercial success of the project; (d)
participating in potential acquisition due diligence as requested by the Chief Executive Officer
and/or Board; (e) in consultation with the Chief Executive Officer, preparing Board meeting agendas
and supporting material; and (f) assuming other specific projects as assigned from time to time by
the Board and/or requested by the Chief Executive Officer.

     3.02 Covenant Against Competition. Executive acknowledges that (i) the principal
business of the Company Group is the manufacture, distribution and sale of iron castings and steel
forgings for the heavy municipal market and iron casting components for the heavy duty truck
non-engine drive train and HVAC compressor markets (collectively, the “Company Business”); (ii) the
Company Business is national in scope; (iii) Executive’s work for Employer and the Company Group
has given and will continue to give him access to the confidential affairs and proprietary
information of the Company Group (collectively, “Confidential Company

3

 

Information”); (iv) the continued success of the Company Group depends in large part on
keeping this information from becoming known to its competitors; and (v) each of ACP and Employer
would not have entered into this Agreement but for the covenants and agreements set forth in this
Article III. Accordingly, Executive covenants and agrees that:

          (a) During the period commencing on the date hereof and ending on the second anniversary
following the Employment Period (the “Restricted Period”), Executive shall not in the United States
of America, directly or indirectly, own, operate, manage, control, participate in, consult with,
advise, or otherwise engage (including by himself, in association with any Person, or through any
Person) (i) in the Company Business; (ii) in any business that otherwise competes with Employer or
any other member of the Company Group as such businesses exist or are in process on the date of the
termination of the Employment Period; or (iii) become interested in any such Person (other than
Employer) as a partner, shareholder, principal, agent, consultant or in any other relationship or
capacity; provided, that Executive may own, directly or indirectly, solely as an investment,
securities of any such Person that are traded on any national securities exchange if Executive (A)
is not a controlling person of, or a member of a group that controls, such Person, (B) does not,
directly or indirectly, own five percent (5%) or more of any class of securities of such Person and
(C) has no active participation in the business of such Person.

          (b) During and after the Restricted Period, Executive shall keep secret and retain in
strictest confidence, and shall not use for his benefit or the benefit of others, except in
connection with the business and affairs of Employer and any other member of the Company Group, all
Confidential Company Information including, without limitation, information with respect to (i)
prospective facilities, (ii) sales figures, (iii) profit or loss figures, and (iv) customers,
clients, suppliers, sources of supply and customer lists and shall not disclose such Confidential
Company Information to anyone outside of the Company Group except with the express written consent
of the Board and except for Confidential Company Information that is at the time of receipt or
thereafter becomes publicly known through no wrongful act of the Executive. Executive shall deliver
to Employer at the termination of the Employment Period, or at any other time Employer may request,
all memoranda, notes, plans, records, reports, computer tapes, printouts and software and other
documents and data (and copies thereof) relating to the Confidential Company Information, Work
Product (as defined below) or the business of Employer or any other member of the Company Group
that he may then possess or have under his control.

          (c) During the Restricted Period, Executive shall not, without the prior written consent of
the Board, directly or indirectly, (i) induce or attempt to induce any employee of Employer or any
other member of the Company Group to leave the employ of Employer or such member of the Company
Group, or in any way interfere with the relationship between Employer or any other member of the
Company Group and any employee thereof, or (ii) induce or attempt to induce any customer, supplier,
licensee, licensor, franchisee or other business relation of Employer or any other member of the
Company Group to cease doing business with Employer or any member of the Company Group, or in any
way interfere with the relationship between any such customer, supplier, licensee or business
relation and Employer or any other member of the Company Group (including, without limitation,
making any disparaging statements or communications about Employer or any other member of the
Company Group).

4

 

          (d) All inventions, innovations, improvements, developments, methods, designs, analyses,
drawings, reports, characters, props, molds and all similar or related information (whether or not
patentable) that relate to Employer’s or any other member of the Company Group actual or
anticipated business, research and development or existing or future products or services and that
are first conceived, developed or made by Executive while an employee of, or a consultant to,
Employer or any other member of the Company Group (collectively, “Work Product”) belong to Employer
or any other member of the Company Group. Executive shall promptly disclose such Work Product to
the Board and perform all actions reasonably requested by the Board (whether during or after the
Employment Period) to establish and confirm such ownership (including, without limitation,
assignments, consents, powers of attorney and other instruments) at Employer’s expense. Executive
acknowledges and agrees that upon termination of the Employment Period, or at the request of the
Board from time to time, Executive shall deliver all Work Product in his possession to Employer.

ARTICLE IV
CERTAIN DEFINITIONS

     “ACP” has the meaning given to such term in the introductory paragraph hereof.

     “Annual Incentive Plan” has the meaning given to such term in Section 1.07 hereof.

     “Board” has the meaning given to such term in Section 1.01 hereof.

     “Cause” means, with respect to Executive, the occurrence of one or more of the following
events: (i) such Executive’s willful breach of, or gross negligence or malfeasance in the
performance of, Executive’s duties under this Agreement; (ii) any material insubordination by
Executive with respect to carrying out the reasonable instructions of the Board; (iii) the
conviction for, or the entering of a guilty plea or plea of nolo contendere with respect to, a
felony, the equivalent thereof or other crime with respect to which imprisonment of more than one
year is a possible punishment or that is expected to result in Significant Injury; (iv) Executive’s
breach of a fiduciary obligation to or improper disclosure of a confidence of the Company Group or
breach of any other confidentiality or non-competition obligation set forth herein; (v) any act of
moral turpitude or willful misconduct by Executive that (1) is intended to result in personal
enrichment of Executive or any related person at the expense of the Company Group or (2) is
reasonably expected to result in Significant Injury.

     “Company Business” has the meaning given to such term in Section 3.02 hereof.

     “Company Group” means ACP, the Employer and their respective Subsidiaries.

     “Confidential Company Information” has the meaning given to such term in Section 3.02 hereof.

     “Confidential Information” has the meaning given to such term in Section 2.01 hereof.

     “Effective Date” means the date the new President and Chief Executive Officer, Robert E.
Ostendorf, Jr., commences employment with the Employer.

5

 

     “Employer” has the meaning given to such term in the introductory paragraph hereof.

     “Employment Period” has the meaning given to such term in Section 1.02 hereof.

     “Equity Incentive Plan” has the meaning given to such term in Section 1.08 hereof.

     “Executive” has the meaning given to such term in the introductory paragraph hereof.

     “Person” shall mean an individual, a partnership, a corporation, a limited liability company,
an association, a joint stock company, a trust, a joint venture, an unincorporated organization or
a governmental entity or any department, agency or political subdivision thereof.

     “Prior Employment Agreement” means the Employment Agreement and Restricted Stock Grant by and
among the Employer, ACP and Executive dated October 8, 2003.

     “Restricted Period” has the meaning given to such term in Section 3.02(a) hereof.

     “Salary” has the meaning given to such term in Section 1.03 hereof.

     “Securities Act” means the Securities Act of 1933, as amended, or any similar federal law then
in force.

     “Significant Injury” means significant economic or reputational injury to the Company Group
(such determination to be made by the Board in its reasonable judgment).

     “Subsidiary” of any Person means a corporation or other entity of which outstanding shares or
ownership interests representing 50% or more of the combined voting power of such corporation or
other entity entitled to elect the management thereof, are owned directly or indirectly by such
Person.

     “Work Product” has the meaning given to such term in Section 3.02(d) hereof.

ARTICLE V
GENERAL PROVISIONS

     5.01 Severability. If it is determined that any of the provisions of this Agreement,
including, without limitation, any of the restrictive covenants in Article III, or any part
thereof, is invalid or unenforceable, the remainder of the provisions of this Agreement shall not
thereby be affected and shall be given full effect, without regard to the invalid portions.

     5.02 Authorization to Modify Restrictions. The provisions of this Agreement will be
enforceable to the fullest extent permissible under applicable law, and the unenforceability (or
modification to conform to law) of any provision will not render unenforceable, or impair, the
remainder of this Agreement. If any provision is found invalid or unenforceable, in whole or in
part, this Agreement will be considered amended to delete or modify, as necessary, the offending
provision or provisions and to alter its bounds to render it valid and enforceable.

6

 

     5.03 No Waiver. The failure of either Employer or Executive to insist upon the
performance of any term in this Agreement, or the waiver of any breach of any such term, shall not
waive any such term or any other term of this Agreement. Instead, this Agreement shall remain in
full force and effect as if no such forbearance or waiver had occurred.

     5.04 Entire Agreement. This Agreement, the Annual Incentive Plan and the Equity
Incentive Plan represent the entire agreement of the parties with respect to Executive’s employment
with Employer and may be amended only by a writing signed by each of them, except as set forth in
the Annual Incentive Plan and Equity Incentive Plan. This Employment Agreement supersedes in all
respects, as of the Effective Date, the Prior Employment Agreement.

     5.05 Governing Law. This Agreement will be governed by and construed in accordance
with the law of the State of Wisconsin without regard to conflicts of laws principles.

     5.06 Recovery of Expenses. Employer has advised Executive to have this Employment
Agreement reviewed by an attorney, and Employer agrees to pay the reasonable documented fees and
expenses of an attorney to represent Executive in connection with the execution of this Employment
Agreement.

     5.07 Assignment. This Agreement, and Executive’s rights and obligations hereunder,
may not be assigned by Executive and any purported assignment by Executive in violation hereof
shall be null and void. In the event of any sale, transfer or other disposition of all or
substantially all of Employer’s assets or business, whether by sale, merger, consolidation,
recapitalization, reorganization or otherwise, Employer may assign this Agreement and its rights
hereunder without Executive’s consent.

     5.08 Counterparts; Section Headings. This Agreement may be executed in any number of
counterparts. Each will be considered an original, but all will constitute one and the same
instrument. The section headings of this Agreement are for convenience of reference only and will
not affect the construction or interpretation of any of its provisions.

     5.09 Notice. All notices, demands or other communications to be given or delivered
under or by reason of the provisions of this Agreement will be in writing and will be deemed to
have been given when delivered personally, mailed by certified or registered mail, return receipt
requested and postage prepaid, or sent via a nationally recognized overnight courier, or sent via
facsimile to the recipient. Such notices, demands and other communications shall be sent to the
address indicated below unless the Executive or Employer notifies the other of a different address:

To Executive:

William M. Barrett
998 Prairie View
Neenah, Wisconsin 54956

7

 

To Employer:

Neenah Foundry Company

2121 Brooks Street
Neenah, Wisconsin 54957
Fax: (920) 729-3633
Attention: Chief Executive Officer

with a copy to (which shall not constitute notice):

Quarles & Brady LLP

411 East Wisconsin Avenue, Suite 2040
Milwaukee, Wisconsin 53202-4497
Fax: (414) 271-3552
Attention: Robert D. Rothacker

8

 

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement or caused this Agreement
to be executed this 29th day of June, 2007.

	 	 	 	 	 
	 	 	 
	 	 /s/ William M. Barrett 	 
	 	William M. Barrett 	 
	 	 	 
	 
	 	NEENAH FOUNDRY COMPANY
 	 
	 	By:  	/s/ Gary W. LaChey 	 
	 	 	Name:  	Gary W. LaChey 	 
	 	 	Title:  	Corporate Vice President—Finance and 
Chief Financial Officer 	 
	 
	 	ACP HOLDING COMPANY

 	 
	 	By:  	/s/ Gary W. LaChey
 	 
	 	 	Name:  	Gary W. LaChey 	 
	 	 	Title:  	Corporate Vice President—Finance and

Chief Financial Officer 	 
	 

9

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