Document:

Exhibit
10.2

 

AMENDED AND RESTATED GUARANTEE AND COLLATERAL AGREEMENT

 

 

made by

 

 

ACCURIDE CORPORATION

 

 

and certain of its Subsidiaries

 

 

in favor of

 

 

CITICORP USA, INC.,

as Administrative Agent

 

 

Dated as of January 31, 2005

 

 

 

 

TABLE OF CONTENTS

 

	
  SECTION 1.

  	
  DEFINED TERMS

  	
   

  
	
   

  	
  1.1

  	
  Definitions

  	
   

  
	
   

  	
  1.2

  	
  Other Definitional Provisions

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2.

  	
  GUARANTEE

  	
   

  
	
   

  	
  2.1

  	
  Guarantee

  	
   

  
	
   

  	
  2.2

  	
  Right of Contribution

  	
   

  
	
   

  	
  2.3

  	
  No Subrogation

  	
   

  
	
   

  	
  2.4

  	
  Amendments, etc. with respect to the Borrower
  Obligations

  	
   

  
	
   

  	
  2.5

  	
  Guarantee Absolute and Unconditional

  	
   

  
	
   

  	
  2.6

  	
  Reinstatement

  	
   

  
	
   

  	
  2.7

  	
  Payments

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3.

  	
  GRANT OF SECURITY INTEREST

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4.

  	
  ACCOUNTS

  	
   

  
	
   

  	
  4.1

  	
  Cash Collateral Accounts

  	
   

  
	
   

  	
  4.2

  	
  Pledged Accounts

  	
   

  
	
   

  	
  4.3

  	
  Cash Concentration Accounts.

  	
   

  
	
   

  	
  4.4

  	
  Securities Account

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5.

  	
  REPRESENTATIONS AND WARRANTIES

  	
   

  
	
   

  	
  5.1

  	
  Title; No Other Liens

  	
   

  
	
   

  	
  5.2

  	
  Perfected First Priority Liens

  	
   

  
	
   

  	
  5.3

  	
  Jurisdiction of Organization; Chief Executive
  Office

  	
   

  
	
   

  	
  5.4

  	
  Inventory and Equipment

  	
   

  
	
   

  	
  5.5

  	
  Farm Products

  	
   

  
	
   

  	
  5.6

  	
  Investment Property

  	
   

  
	
   

  	
  5.7

  	
  Receivables

  	
   

  
	
   

  	
  5.8

  	
  Contracts

  	
   

  
	
   

  	
  5.9

  	
  Intellectual Property

  	
   

  
	
   

  	
  5.11

  	
  Accounts

  	
   

  
	
   

  	
  5.12

  	
  Consents.

  	
   

  
	
   

  	
  5.13

  	
  Representations
  and Warranties in the Credit Agreement

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6.

  	
  COVENANTS

  	
   

  
	
   

  	
  6.1

  	
  Delivery of
  Instruments, Certificated Securities and Chattel Paper

  	
   

  
	
   

  	
  6.2

  	
  Maintenance of
  Insurance

  	
   

  
	
   

  	
  6.3

  	
  Payment of
  Obligations

  	
   

  
	
   

  	
  6.4

  	
  Transfers;
  Maintenance of Perfected Security Interest; Further Documentation

  	
   

  
	
   

  	
  6.5

  	
  Changes in
  Name, etc

  	
   

  
	
   

  	
  6.6

  	
  Notices

  	
   

  
	
   

  	
  6.7

  	
  Investment
  Property

  	
   

  
	
   

  	
  6.8

  	
  Receivables

  	
   

  
	
   

  	
  6.9

  	
  Contracts

  	
   

  
	
   

  	
  6.10

  	
  Intellectual
  Property

  	
   

  
	
   

  	
  6.11

  	
  Commercial
  Tort Claims

  	
   

  
	
   

  	
  6.12

  	
  Vehicles

  	
   

  

 

i

 

	
   

  	
  6.13

  	
  Covenants in
  the Loan Documents

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7.

  	
  REMEDIAL PROVISIONS

  	
   

  
	
   

  	
  7.1

  	
  Certain Matters
  Relating to Receivables

  	
   

  
	
   

  	
  7.2

  	
  Communications
  with Obligors; Grantors Remain Liable

  	
   

  
	
   

  	
  7.3

  	
  Pledged Stock

  	
   

  
	
   

  	
  7.4

  	
  Proceeds to be
  Turned Over To Administrative Agent

  	
   

  
	
   

  	
  7.5

  	
  Application of
  Proceeds

  	
   

  
	
   

  	
  7.6

  	
  Code and Other
  Remedies

  	
   

  
	
   

  	
  7.7

  	
  Acknowledgments
  Relating to Investment Property and Account Collateral

  	
   

  
	
   

  	
  7.8

  	
  Deficiency

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 8.

  	
  THE ADMINISTRATIVE AGENT

  	
   

  
	
   

  	
  8.1

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

  	
   

  
	
   

  	
  8.2

  	
  Duty of
  Administrative Agent

  	
   

  
	
   

  	
  8.3

  	
  Execution of
  Financing Statements

  	
   

  
	
   

  	
  8.4

  	
  Authority of
  Administrative Agent

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 9.

  	
  MISCELLANEOUS

  	
   

  
	
   

  	
  9.1

  	
  Amendments in
  Writing

  	
   

  
	
   

  	
  9.2

  	
  Notices

  	
   

  
	
   

  	
  9.3

  	
  No Waiver by
  Course of Conduct; Cumulative Remedies

  	
   

  
	
   

  	
  9.4

  	
  Enforcement
  Expenses; Indemnification

  	
   

  
	
   

  	
  9.5

  	
  Successors and
  Assigns

  	
   

  
	
   

  	
  9.6

  	
  Set-Off

  	
   

  
	
   

  	
  9.7

  	
  Counterparts

  	
   

  
	
   

  	
  9.8

  	
  Severability

  	
   

  
	
   

  	
  9.9

  	
  Section Headings

  	
   

  
	
   

  	
  9.10

  	
  Integration

  	
   

  
	
   

  	
  9.11

  	
  GOVERNING
  LAW

  	
   

  
	
   

  	
  9.12

  	
  Submission
  To Jurisdiction; Waivers

  	
   

  
	
   

  	
  9.13

  	
  Acknowledgements

  	
   

  
	
   

  	
  9.14

  	
  Additional
  Grantors

  	
   

  
	
   

  	
  9.15

  	
  Releases

  	
   

  
	
   

  	
  9.16

  	
  WAIVER OF
  JURY TRIAL

  	
   

  
	
   

  	
   

  
	
  SCHEDULES

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Schedule 1

  	
   

  	
  Notice Addresses

  	
   

  
	
  Schedule 2

  	
   

  	
  Investment
  Property

  	
   

  
	
  Schedule 3

  	
   

  	
  Perfection
  Matters

  	
   

  
	
  Schedule 4

  	
   

  	
  Jurisdictions of
  Organization and Chief Executive Offices

  	
   

  
	
  Schedule 5

  	
   

  	
  Jurisdictions of
  Foreign Qualification

  	
   

  
	
  Schedule 6

  	
   

  	
  Intellectual
  Property

  	
   

  
	
  Schedule 7

  	
   

  	
  Contracts

  	
   

  
	
  Schedule 8

  	
   

  	
  Pledged Accounts
  and Cash Concentration Accounts

  	
   

  
						

 

ii

 

	
  EXHIBITS

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Exhibit A

  	
   

  	
  Form of Cash
  Collateral Account Letter

  	
   

  
	
  Exhibit B

  	
   

  	
  Form of Pledged
  Account Letter

  	
   

  
	
  Exhibit C

  	
   

  	
  Form of Cash
  Concentration Account Letter

  	
   

  
	
  Exhibit D

  	
   

  	
  Form of Control
  Agreement

  	
   

  
	
  Exhibit E

  	
   

  	
  Form of
  Intellectual Property Security Agreement

  	
   

  
	
  Exhibit F

  	
   

  	
  Form of
  Intellectual Property Security Agreement Supplement

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Annex 1

  	
   

  	
  Form of
  Assumption Agreement

  	
   

  

 

iii

 

AMENDED AND
RESTATED GUARANTEE AND COLLATERAL AGREEMENT

 

AMENDED AND
RESTATED GUARANTEE AND COLLATERAL AGREEMENT, dated as of January 31, 2005,
made by each of the signatories hereto (together with any other entity that may
become a party hereto as provided herein, the “Grantors”), in favor of
Citicorp USA, Inc., as Administrative Agent (in such capacity, the “Administrative
Agent”) for the banks and other financial institutions or entities (the “Lenders”)
from time to time parties to the Fourth Amended and Restated Credit Agreement,
dated as of January 31, 2005 (as amended, supplemented or otherwise
modified from time to time, the “Credit Agreement”), among Accuride
Corporation (the “U.S. Borrower”), Accuride Canada Inc. (the “Canadian
Borrower” and, together with the U.S. Borrower, the “Borrowers”), the
Lenders and the Administrative Agent.

 

W
I  T  N  E  S  S  E  T  H:

 

WHEREAS, the
Borrowers entered into the Third Amended and Restated Credit Agreement, dated
as of June 13, 2003 (the “Existing Credit Agreement”), with the
banks, financial institutions and other institutional lenders party thereto as
Lenders (as defined therein), Citibank, N.A. as initial issuing bank, Citicorp
USA, Inc. (“Citicorp”) as swing line bank and as administrative agent,
Citigroup Global Markets Inc. and Lehman Brothers Inc. as joint lead arrangers
and joint book-runners for the Facilities (as defined therein), Lehman
Commercial Paper Inc. as syndication agent, and Deutsche Bank Trust Company
Americas as documentation agent;

 

WHEREAS, as a
condition precedent to the effectiveness of the Existing Credit Agreement,
certain subsidiaries of the U.S. Borrower were required to enter into the
Subsidiaries Guaranty, dated January 21, 1998 (as modified pursuant to the
Consent dated as of April 16, 1999, the Consent dated as of July 27,
2001 and the Consent dated as of June 13, 2003, and as further amended,
supplemented or otherwise modified from time to time, the “Existing
Subsidiaries Guaranty”) in favor of the secured parties referred to in the
Existing Credit Agreement and Citicorp as administrative agent, pursuant to
which the Subsidiary Guarantors (as defined therein) guaranteed the obligations
of the Borrowers under the Existing Credit Agreement;

 

WHEREAS, as a
condition precedent to the effectiveness of the Existing Credit Agreement, the
U.S. Borrower and certain of its subsidiaries were required to enter into the
Second Amended and Restated Pledge Agreement, dated as of July 27, 2001
(as amended, supplemented or otherwise modified from time to time, the “Existing
Pledge Agreement”) made by the U.S. Borrower and the other Pledgors (as
defined therein) to Citicorp as administrative agent for the benefit of the
secured parties referred to in the Existing Credit Agreement, pursuant to which
the Pledgors (as defined therein) pledged the Collateral (as defined therein)
as security for the obligations of the Borrowers under the Existing Credit
Agreement;

 

WHEREAS, as a
condition precedent to the effectiveness of the Existing Credit Agreement, the
U.S. Borrower and certain of its subsidiaries were required to enter into the
Security Agreement, dated as of July 27, 2001 (as amended, supplemented or
otherwise modified from time to time, the “Existing U.S. Security Agreement”)
made by the U.S. Borrower and the other Grantors (as defined therein) in favor of
Citicorp as administrative agent for the benefit of the secured parties
referred to in the Existing Credit Agreement, pursuant to which the U.S.
Borrower and its such subsidiaries granted a first priority security interest
in the Collateral (as defined therein) to secure the obligations of the
Borrowers under the Existing Credit Agreement;

 

4

 

WHEREAS, in
order to (a) finance the Transactions (as defined in the Credit Agreement), (b)
pay certain fees and expenses related to the Transactions and (c) finance the
working capital and other business requirements of the U.S. Borrower and its
subsidiaries following the consummation of the Transactions, the Borrowers have
requested that the Lenders amend and restate the Existing Credit Agreement;

 

WHEREAS, the
Lender Parties have indicated their willingness to agree to so amend and
restate the Existing Credit Agreement on the terms and conditions of the Credit
Agreement;

 

WHEREAS, the
Borrowers are members of an affiliated group of companies that includes each
other Grantor;

 

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

 

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

 

WHEREAS, it is
a condition precedent to the obligation of the Lender Parties to make their
respective extensions of credit to the Borrowers under the Credit Agreement
that the Grantors shall have provided guaranties, pledges and grants of
collateral security substantially similar to those given pursuant to the
Existing Subsidiaries Guaranty, the Existing Pledge Agreement and the Existing
U.S. Security Agreement (the “Existing Guarantee and Collateral Agreements”);

 

WHEREAS, this
Agreement amends and restates the guaranties, pledges and grants of collateral
security provided for under the Existing Guarantee and Collateral Agreements;
and

 

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

 

NOW,
THEREFORE, in consideration of the premises and to induce the Administrative
Agent and the Lenders to make Advances and issue Letters of Credit under the
Credit Agreement and to induce the Hedge Banks to enter into Bank Hedge
Agreements from time to time, each Grantor hereby agrees with the Administrative
Agent, for the ratable benefit of the Secured Parties, as follows:

 

SECTION 1.           DEFINED TERMS

 

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

 

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

 

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

 

 

“AKW LLC”:  means AKW General Partner L.L.C., a Delaware
limited liability company.

 

“Borrower
Obligations”:  the collective
reference to the unpaid principal of and interest on the Advances,
reimbursement obligations in respect of Letters of Credit and all other
Obligations of the Borrowers (including, without limitation, interest accruing
at the then applicable rate provided in the Credit Agreement after the maturity
of the Advances, reimbursement obligations in respect of Letters of Credit and
the other Obligations and interest accruing at the then applicable rate
provided in the Credit Agreement after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to either Borrower, whether or not a claim for post-filing
or post-petition interest is allowed in such proceeding) to the Administrative
Agent or any Lender Party (or, in the case of any Bank Hedge Agreement, any
Affiliate of any Lender Party), whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred, which
may arise under, out of, or in connection with, the Credit Agreement, this
Agreement, the other Loan Documents, any Letter of Credit, any Bank Hedge Agreement
or any other document made, delivered or given in connection with any of the
foregoing, in each case whether on account of principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses or otherwise
(including, without limitation, all fees and disbursements of counsel to the
Administrative Agent or to the Lender Parties that are required to be paid by
any Borrower pursuant to the terms of any of the foregoing agreements).

 

“Borrowers’
Collateral Investments”:  as defined
in Section 4.1(b).

 

“Capital
Stock”:  any and all shares,
interests, participations or other equivalents (however designated) of capital
stock of a corporation, any and all equivalent ownership interests (including,
without limitation, limited liability company interests, partnership interests
and other equity interests) in a Person (other than a corporation) and any and
all warrants, rights or options to purchase any of the foregoing.

 

“Cash
Collateral Account”:  (a) with
respect to the U.S. Borrower, the cash collateral account opened with Citibank,
N.A. (“Citibank”) at its offices at 399 Park Avenue, New York, New York
10043, and (b) with respect to the Canadian Borrower, the cash collateral
account opened with Citibank at its Affiliate’s offices at 123 Front Street
West, Toronto, Ontario, Canada.  Each of
the Cash Collateral Accounts have been opened pursuant to and for the purposes
set forth in Section 2.06(viii) of the Credit Agreement and Section 4.1
of this Agreement, and is under the sole and exclusive dominion and control of
the Administrative Agent and subject to the terms of this Agreement.

 

“Cash
Concentration Accounts”:  the
accounts listed on Schedule 8 hereto as the Cash Concentration Accounts.

 

“Cash
Concentration Account Letters”:  as
defined in Section 4.3(a)(i).

 

“Cash
Concentration Collateral Investments”: 
as defined in Section 4.3(c).

 

“Collateral”:  as defined in Section 3.

 

“Collateral
Account”:  any collateral account
established by the Administrative Agent as provided in Section 7.1 or 7.4.

 

“Collateral
Bank”:  as defined in Section 4.3(a)(i).

 

“Collateral
Investments”:  as defined in Section 4.1(c).

 

 

“Computer
Software”:  all computer software
programs and databases (including, without limitation, source code, object code
and all related applications and data files), firmware, and documentation and
materials relating thereto, and all rights with respect to the foregoing,
together with any and all options, warranties, service contracts, program
services, test rights, maintenance rights, improvement rights, renewal rights
and indemnifications and any substitutions, replacements, additions or model
conversions of any of the foregoing.

 

“Contracts”:  the contracts and agreements listed in Schedule 7,
as the same may be amended, supplemented or otherwise modified from time to
time, including, without limitation, (i) all rights of any Grantor to receive
moneys due and to become due to it thereunder or in connection therewith, (ii)
all rights of any Grantor to damages arising thereunder and (iii) all rights of
any Grantor to perform and to exercise all remedies thereunder.

 

“Control
Agreements”:  means an agreement, in
substantially the form of Exhibit D hereto.

 

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

 

“Copyright
Licenses”:  any written agreement
naming any Grantor as licensor or licensee (including, without limitation,
those listed in Schedule 6), granting any right under any Copyright,
including, without limitation, the grant of rights to manufacture, distribute,
exploit and sell materials derived from any Copyright.

 

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

 

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

 

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

 

“Governmental
Authority”:  any nation or
government, any state or other political subdivision thereof, any agency,
authority, instrumentality, regulatory body, court, central bank or other
entity exercising executive, legislative, judicial, taxing, regulatory or
administrative functions of or pertaining to government, any securities
exchange and any self-regulatory organization (including the National
Association of Insurance Commissioners).

 

“Guarantor
Obligations”:  with respect to any
Guarantor, all obligations and liabilities of such Guarantor which may arise
under or in connection with this Agreement (including, without limitation, Section 2)
or any other Loan Document to which such Guarantor is a party, in each case
whether on account of guarantee obligations, reimbursement obligations, fees,
indemnities, costs, expenses or otherwise (including, without limitation, all
fees and disbursements of counsel to the Administrative Agent or to the Secured
Parties that are required to be paid by such Guarantor pursuant to the terms of
this Agreement or any other Loan Document).

 

 

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

 

“Henderson
LLC”:  means Accuride Henderson
Limited Liability Company, a Delaware limited liability company.

 

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

 

“Intellectual
Property Security Agreement”:  as
defined in Section 6.10(i).

 

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

 

“Investment
Property”:  the collective reference
to (i) all “investment property” as such term is defined in Section 9-102(a)(49)
of the New York UCC (other than any Foreign Subsidiary Voting Stock excluded
from the definition of “Pledged Stock”) and (ii) whether or not constituting “investment
property” as so defined, all Pledged Notes and all Pledged Stock.

 

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

 

“License”:  all license agreements, permits,
authorizations and franchises, whether with respect to the Patents, Trademarks,
Copyrights, Trade Secrets or Computer Software, or with respect to the patents,
trademarks, copyrights, trade secrets, computer software or other proprietary
right of any other Person, and all income, royalties and other payments now or
hereafter due and/or payable with respect thereto, subject, in each case, to
the terms of such license agreements, permits, authorizations and franchises.

 

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

 

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

 

“Obligor”:  as defined in Section 4.2(b).

 

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

 

“Patent License”:  all agreements, whether written or oral,
providing for the grant by or to any Grantor of any right to manufacture, use
or sell any invention covered in whole or in part by a Patent, including,
without limitation, any of the foregoing referred to in Schedule 6.

 

 

“Petty Cash
Accounts”:  petty cash accounts
maintained by any Grantor with any bank, provided that (i) the amount on
deposit in each such account shall not exceed $100,000 at any time and (ii) the
aggregate amount on deposit in all such accounts shall not exceed $500,000 at
any time.

 

“Pledged
Account Banks”:  as defined in Section 4.2(a).

 

“Pledged
Account Letters”:  as defined in Section 4.2(a).

 

“Pledged
Accounts”:  as defined in Section 4.2(a).

 

“Pledged
Notes”:  all promissory notes listed
on Schedule 2, all Intercompany Notes at any time issued to any
Grantor and all other promissory notes issued to or held by any Grantor in an
aggregate principal amount in excess of $1,000,000 (other than promissory notes
issued in connection with extensions of trade credit by any Grantor in the
ordinary course of business).

 

“Pledged
Stock”:  the shares of Capital Stock
listed on Schedule 2, together with any other shares, stock
certificates, options, interests or rights of any nature whatsoever in respect
of the Capital Stock of any Person that may be issued or granted to, or held
by, any Grantor while this Agreement is in effect; provided that in no
event shall more than 66% of the total outstanding Foreign Subsidiary Voting
Stock of any Foreign Subsidiary be required to be pledged hereunder.

 

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

 

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

 

“Securities
Account”:  the Borrower’s Account,
Account No. 878283, with Banc of America Securities LLC at its office at 233
South Wacker Drive, 27th Floor, Chicago IL.

 

“Securities
Account Control Agreement”:  as
defined in Section 4.4(b).

 

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

 

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

 

“Trademark
License”:  any agreement, whether
written or oral, providing for the grant by or to any Grantor of any right to
use any Trademark, including, without limitation, any of the foregoing referred
to in Schedule 6.

 

“Trade
Secrets”:  all confidential and
proprietary information, including, without limitation, know-how, trade
secrets, manufacturing and production processes and techniques, inventions,

 

 

research and
development information, technical data, financial, marketing and business
data, pricing and cost information, business and marketing plans and customer
and supplier lists and information.

 

“Unmatured
Surviving Obligations”:  Obligations
which by their terms survive termination of the Credit Agreement or any other
Loan Document, as applicable, and which, at the relevant time, are not then due
and payable.

 

“U.S.
Borrower Collateral Investments”:  as
defined in Section 4.3(b).

 

“Vehicles”:  all cars, trucks, trailers, construction and
earth moving equipment and other vehicles covered by a certificate of title law
of any state and all tires and other appurtenances to any of the foregoing.

 

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

 

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

 

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

 

SECTION 2.           GUARANTEE

 

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

 

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

 

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

 

(d)           The guarantee contained in this Section 2 shall remain
in full force and effect until all the Borrower Obligations and the obligations
of each Guarantor under the guarantee contained in this Section 2 shall
have been satisfied by payment in full, no Letter of Credit shall be
outstanding and the Commitments and any Bank Hedge Agreements shall be
terminated, notwithstanding that from time to time during the term of the
Credit Agreement the Borrowers may be free from any Borrower Obligations.

 

(e)           No payment made by either Borrower, any of the Guarantors,
any other guarantor or any other Person or received or collected by the
Administrative Agent or any Secured Party from either

 

 

Borrower, any of the Guarantors, any other guarantor or any other
Person by virtue of any action or proceeding or any set-off or appropriation or
application at any time or from time to time in reduction of or in payment of
the Borrower Obligations shall be deemed to modify, reduce, release or
otherwise affect the liability of any Guarantor hereunder which shall,
notwithstanding any such payment (other than any payment made by such Guarantor
in respect of the Borrower Obligations or any payment received or collected
from such Guarantor in respect of the Borrower Obligations), remain liable for
the Borrower Obligations up to the maximum liability of such Guarantor
hereunder until the Borrower Obligations are paid in full, no Letter of Credit
shall be outstanding and the Commitments and any Bank Hedge Agreements are
terminated.

 

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

 

2.3           No
Subrogation.  Notwithstanding any
payment made by any Guarantor hereunder or any set-off or application of funds
of any Guarantor by the Administrative Agent or any Secured Party, no Guarantor
shall be entitled to be subrogated to any of the rights of the Administrative Agent
or any Secured Party against either Borrower or any other Guarantor or any
collateral security or guarantee or right of offset held by the Administrative
Agent or any Secured Party for the payment of the Borrower Obligations, nor
shall any Guarantor seek or be entitled to seek any contribution,
indemnification or reimbursement from either Borrower or any other Guarantor in
respect of payments made by such Guarantor hereunder, until all amounts owing
to the Administrative Agent and the Secured Parties by the Borrowers on account
of the Borrower Obligations (other than Unmatured Surviving Obligations) are
paid in full, no Letter of Credit shall be outstanding and the Commitments and
any Bank Hedge Agreements are terminated. 
If any amount shall be paid to any Guarantor on account of such
subrogation rights at any time when all of the Borrower Obligations (other than
Unmatured Surviving Obligations) shall not have been paid in full, such amount
shall be held by such Guarantor in trust for the Administrative Agent and the
Secured Parties, segregated from other funds of such Guarantor, and shall,
forthwith upon receipt by such Guarantor, be turned over to the Administrative
Agent in the exact form received by such Guarantor (duly indorsed by such
Guarantor to the Administrative Agent, if required), to be applied against the
Borrower Obligations, whether matured or unmatured, in such order as the
Administrative Agent may determine.

 

2.4           Amendments,
etc. with respect to the Borrower Obligations.  Each Guarantor shall remain obligated
hereunder notwithstanding that, without any reservation of rights against any
Guarantor and without notice to or further assent by any Guarantor, any demand
for payment of any of the Borrower Obligations made by the Administrative Agent
or any Secured Party may be rescinded by the Administrative Agent or such
Secured Party and any of the Borrower Obligations continued, and the Borrower
Obligations, or the liability of any other Person upon or for any part thereof,
or any collateral security or guarantee therefor or right of offset with
respect thereto, may, from time to time, in whole or in part, be renewed,
extended, amended, modified, accelerated, compromised, waived, surrendered or
released by the Administrative Agent or any Secured Party, and the Credit
Agreement and the other Loan Documents and any other documents executed and
delivered in connection therewith may be amended, modified, supplemented or
terminated, in whole or in part, as the Administrative Agent (or the Majority
Lenders, Majority Facility Lenders, all affected Lenders or all Lenders, as the
case may be) may deem advisable from time to time, and any collateral security,
guarantee or right of offset at any time held by

 

 

the Administrative Agent or any
Secured Party for the payment of the Borrower Obligations may be sold,
exchanged, waived, surrendered or released. 
Neither the Administrative Agent nor any Secured Party shall have any
obligation to protect, secure, perfect or insure any Lien at any time held by
it as security for the Borrower Obligations or for the guarantee contained in
this Section 2 or any property subject thereto.

 

2.5           Guarantee
Absolute and Unconditional.  Each
Guarantor waives any and all notice of the creation, renewal, extension or
accrual of any of the Borrower Obligations and notice of or proof of reliance
by the Administrative Agent or any Secured Party upon the guarantee contained
in this Section 2 or acceptance of the guarantee contained in this Section 2;
the Borrower Obligations, and any of them, shall conclusively be deemed to have
been created, contracted or incurred, or renewed, extended, amended or waived,
in reliance upon the guarantee contained in this Section 2; and all
dealings between either Borrower and any of the Guarantors, on the one hand,
and the Administrative Agent and the Secured Parties, on the other hand,
likewise shall be conclusively presumed to have been had or consummated in
reliance upon the guarantee contained in this Section 2.  Each Guarantor waives diligence, presentment,
protest, demand for payment and notice of default or nonpayment to or upon
either Borrower or any of the Guarantors with respect to the Borrower
Obligations.  Each Guarantor understands
and agrees that the guarantee contained in this Section 2 shall be
construed as a continuing, absolute and unconditional guarantee of payment
without regard to (a) the validity or enforceability of the Credit Agreement or
any other Loan Document, any of the Borrower Obligations or any other
collateral security therefor or guarantee or right of offset with respect
thereto at any time or from time to time held by the Administrative Agent or
any Secured Party, (b) any defense, set-off or counterclaim (other than a
defense of payment or performance) which may at any time be available to or be
asserted by either Borrower or any other Person against the Administrative
Agent or any Secured Party, (c) any change, restructuring or termination of the
corporate structure or existence of either Borrower or any of its Subsidiaries,
(d) any failure of any Secured Party to disclose to either Borrower or any
Guarantor any information relating to the financial condition, operations,
properties or prospects of any other Loan Party now or in the future known to
any Secured Party (each Guarantor waiving any duty on the part of the Secured
Parties to disclose such information), or (e) any other circumstance whatsoever
(with or without notice to or knowledge of either Borrower or such Guarantor)
which constitutes, or might be construed to constitute, an equitable or legal
discharge of either Borrower for the Borrower Obligations, or of such Guarantor
under the guarantee contained in this Section 2, in bankruptcy or in any
other instance.  When making any demand
hereunder or otherwise pursuing its rights and remedies hereunder against any
Guarantor, the Administrative Agent or any Secured Party may, but shall be
under no obligation to, make a similar demand on or otherwise pursue such
rights and remedies as it may have against either Borrower, any other Guarantor
or any other Person or against any collateral security or guarantee for the
Borrower Obligations or any right of offset with respect thereto, and any
failure by the Administrative Agent or any Secured Party to make any such
demand, to pursue such other rights or remedies or to collect any payments from
either Borrower, any other Guarantor or any other Person or to realize upon any
such collateral security or guarantee or to exercise any such right of offset,
or any release of either Borrower, any other Guarantor or any other Person or
any such collateral security, guarantee or right of offset, shall not relieve
any Guarantor of any obligation or liability hereunder, and shall not impair or
affect the rights and remedies, whether express, implied or available as a
matter of law, of the Administrative Agent or any Secured Party against any
Guarantor.  For the purposes hereof “demand”
shall include the commencement and continuance of any legal proceedings.

 

2.6           Reinstatement.  The guarantee contained in this Section 2
shall continue to be effective, or be reinstated, as the case may be, if at any
time payment, or any part thereof, of any of the Borrower Obligations is
rescinded or must otherwise be restored or returned by the Administrative Agent
or any Secured Party upon the insolvency, bankruptcy, dissolution, liquidation
or reorganization of either Borrower or any Guarantor, or upon or as a result
of the appointment of a receiver, intervenor or

 

 

conservator of, or trustee or
similar officer for, either Borrower or any Guarantor or any substantial part
of its property, or otherwise, all as though such payments had not been made.

 

2.7           Payments.  Each Guarantor hereby guarantees that
payments hereunder will be paid to the Administrative Agent without set-off or
counterclaim in U.S. Dollars at the Applicable Lending Office of the
Administrative Agent.

 

SECTION 3.           GRANT OF SECURITY INTEREST

 

Each Grantor
hereby assigns and transfers to the Administrative Agent, and hereby grants to
the Administrative Agent, for the ratable benefit of the Secured Parties, a
security interest in, all of the following property now owned or at any time
hereafter acquired by such Grantor or in which such Grantor now has or at any
time in the future may acquire any right, title or interest (collectively, the “Collateral”),
as collateral security for the prompt and complete payment and performance when
due (whether at the stated maturity, by acceleration or otherwise) of such
Grantor’s Obligations:

 

(a)           all Accounts, including, without limitation, the Cash
Collateral Accounts, the Pledged Accounts, the Cash Concentration Accounts and
the Securities Account;

 

(b)           all Chattel Paper;

 

(c)           all Contracts;

 

(d)           all Deposit Accounts;

 

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

 

(f)            all Equipment;

 

(g)           all Fixtures;

 

(h)           all General Intangibles;

 

(i)            all Instruments;

 

(j)            all Intellectual Property;

 

(k)           all Inventory;

 

(l)            all Investment Property;

 

(m)          all Letter-of-Credit Rights;

 

(n)           all Vehicles and title documents with respect to Vehicles;

 

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

 

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

 

 

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

 

provided, however, that

 

(i)            notwithstanding
any of the other provisions set forth in this Section 3, this Agreement
shall not constitute a grant of a security interest in (A) any property to the
extent that such grant of a security interest is prohibited by any Requirements
of Law of a Governmental Authority, requires a consent not obtained of any
Governmental Authority pursuant to such Requirement of Law or is prohibited by,
or constitutes a breach or default under or results in the termination of or
requires any consent not obtained under, any contract, license, agreement,
instrument or other document evidencing or giving rise to such property or, in
the case of any Investment Property, Pledged Stock or Pledged Note, any
applicable shareholder or similar agreement, except to the extent that such
Requirement of Law or the term in such contract, license, agreement, instrument
or other document or shareholder or similar agreement providing for such
prohibition, breach, default or termination or requiring such consent is
ineffective under applicable law; provided that, immediately upon the
ineffectiveness, lapse or termination of any such provision, the Collateral
shall include, and such Grantor shall be deemed to have granted a security
interest in, all such rights and provisions as if such provision had never been
in effect, or (B) in any Equipment that is subject to a Capital Lease or
purchase money financing (in each case as permitted by the Credit Agreement) so
long as, and only so long as, such Capital Lease or purchase money financing by
its terms would not allow the security interest created hereunder; and

 

(ii)           the
pledge and assignment by the U.S. Borrower of and the grant by the U.S. Borrower
of a security interest in the Pledged Stock issued by the Canadian Borrower
shall be limited as follows: (A) the pledge and assignment of and the grant of
a security interest in 66%, and only 66%, of such Pledged Stock secure the
payment of the Obligations of the U.S. Borrower now or hereafter existing under
the Loan Documents other than the Obligations of the U.S. Borrower under the
Guaranty and (B) the pledge and assignment of and the grant of a security
interest in 100% of such Pledged Stock secure the payment by the U.S. Borrower
pursuant to the Guaranty of the Guaranteed Obligations now or hereafter
existing under the Loan Documents.

 

SECTION 4.           ACCOUNTS

 

4.1           Cash
Collateral Accounts.

 

(a)           So long as any of the Advances shall remain unpaid, any Letter
of Credit shall be outstanding or any of the Lender Parties shall have any
Commitment under the Credit Agreement:

 

(i)            each
of the Borrowers will maintain its Cash Collateral Account with Citibank in
accordance with the terms of this Agreement and those certain letter agreements
dated as of August 27, 2001, as amended (each, a “Cash Collateral
Account Letter”) among such Borrower, Citibank and the Administrative
Agent, which agreements are in substantially the form of Exhibit A hereto or
otherwise in form and substance reasonably satisfactory to the Administrative
Agent.  The Administrative Agent shall
have sole and exclusive dominion and control of each Cash Collateral Account
subject to the terms of this Agreement; and

 

 

(ii)           it
shall be a term and condition of each Cash Collateral Account, notwithstanding
any term or condition to the contrary in any other agreement relating to such
Cash Collateral Account, that no amount (including, without limitation,
interest on Collateral Investments related thereto) shall be paid or released
to or for the account of, or withdrawn by or for the account of, any of the
Grantors or any other Person from such Cash Collateral Account, except as
otherwise provided in Sections 4.1(g) and (h) and Section 7.

 

Each Cash Collateral
Account shall be subject to such applicable laws (including, without
limitation, such applicable regulations of the Board of Governors of the
Federal Reserve System and of any other appropriate banking authority or other
Governmental Authority) as are in effect from time to time.

 

(b)           If requested by the applicable Borrower, the Administrative
Agent will, subject to the provisions of Sections 4.1(g) and (h) and Section 7,
from time to time, so long as no Default under Section 7.01(a) or 7.01(f)
of the Credit Agreement or Event of Default has occurred and is continuing, (i)
invest amounts on deposit in the Cash Collateral Account of such Borrower in
such Cash Equivalents as such Borrower may select, in each case which
investments shall be made in the name of, and with the entitlement holder
being, the Administrative Agent, on behalf of such Borrower, and (ii) invest
interest paid on the Cash Equivalents referred to in clause (i) above, and
reinvest other proceeds of any such Cash Equivalents that may mature or be
sold, in each case in such Cash Equivalents as such Borrower may select, in
each case which investments shall be made in the name of, and with the
entitlement holder being, the Administrative Agent, on behalf of such Borrower
(the Cash Equivalents referred to in clauses (i) and (ii) of this Section 4.1(b)
being, collectively, the “Borrowers’ Collateral Investments”).

 

(c)           Upon the occurrence and during the continuance of a Default
under Section 7.01(a) or 7.01(f) of the Credit Agreement or an Event of
Default, the Administrative Agent may, subject to the provisions of Section 7,
from time to time (i) invest amounts on deposit in each Cash Collateral
Account, and any cash proceeds collected by or on behalf of the Administrative
Agent and held pursuant to Section 7.4, in such Cash Equivalents as the
Administrative Agent may select, in each case which investments shall be made
in the name of, and with the entitlement holder being, the Administrative
Agent, on behalf of the applicable Borrower, and (ii) invest interest paid on
the Cash Equivalents referred to in clause (i) above, and reinvest other
proceeds of any such Cash Equivalents that may mature or be sold, in such Cash
Equivalents as the Administrative Agent may select, in each case which investments
shall be made in the name of, and with the entitlement holder being, the
Administrative Agent, on behalf of the applicable Borrower (the Cash
Equivalents referred to in clauses (i) and (ii) of this Section 4.1(c),
together with the Borrowers’ Collateral Investments, being, collectively, the “Collateral
Investments”).

 

(d)           Interest and proceeds that are not invested or reinvested in
Collateral Investments as provided in subsection (b) or (c) of this Section 4.1
shall be deposited and held in the applicable Cash Collateral Account.

 

(e)           The Administrative Agent shall not have any liability to any
of the Grantors or any of the other Secured Parties for, or as a result of, any
losses suffered from any Collateral Investment made by it in accordance with this
Section 4.1 or if the earnings realized on any such Collateral Investment
are less than otherwise could have been achieved had other Cash Equivalents
been selected by the Borrowers or the Administrative Agent pursuant to the
terms of subsection (b) or (c), respectively, of this Section 4.1.

 

(f)            All of the Collateral
Investments made in respect of the Cash Collateral Accounts and all interest
and income received thereon and therefrom, and the net proceeds realized upon
the maturity or sale thereof, shall be held in the Cash Collateral Account as
Collateral, which amounts may be released solely in accordance with the
provisions of Sections 4.1(g) and (h) and Section 7.

 

 

(g)           The Administrative Agent is hereby authorized, without any
further action by or notice to or from any of the Borrowers, to maintain any
amounts deposited into the Cash Collateral Account of any such Borrower
pursuant to Section 2.06(b)(viii) of the Credit Agreement until the last
day of the Interest Period then in effect for any outstanding Eurodollar Rate
Advances and, on such last day, to pay and release such amounts from such Cash
Collateral Account for the prepayment to each of the Appropriate Lenders of the
Eurodollar Rate Advances outstanding on such day in accordance with Section 2.06(b)
of the Credit Agreement, with any excess amounts in such Cash Collateral
Account to be transmitted to the account designated by the applicable Borrower,
provided that no Default under section 7.01(a) or (f) of the Credit
Agreement or no Event of Default has occurred and is continuing.

 

(h)           Subject to clause (g) above, so long as no Default under Section 7.01(a)
or (f) of the Credit Agreement or no Event of Default shall have occurred and
be continuing, the Administrative Agent will pay and release to the applicable
Borrower or at its order and at the request of such Borrower, the amount, if
any, by which the credit balance of the Cash Collateral Account of such
Borrower exceeds all amounts then due and payable by such Borrower under the
Loan Documents together with all accrued and unpaid interest and fees under the
Credit Agreement.

 

4.2           Pledged
Accounts.  So long as any Advance or
any other Obligation (other than any Unmatured Surviving Obligation) of any
Loan Party under any Loan Document shall remain unpaid, any Letter of Credit
shall be outstanding, any Bank Hedge Agreement shall be in effect or any Lender
Party shall have any Commitment under the Credit Agreement:

 

(a)           within 90 days of the Closing Date, each Grantor will
establish and maintain lockboxes and deposit accounts (collectively, the “Pledged
Accounts”) only with banks (the “Pledged Account Banks”) that have
entered into letter agreements in substantially the form of Exhibit B hereto or
otherwise in form and substance reasonably satisfactory to the Administrative
Agent with such Grantor and the Administrative Agent (such letters, together
with any Pledged Account Letters entered into pursuant to the Existing U.S.
Security Agreement, the “Pledged Account Letters”), provided that
the Petty Cash Accounts shall not be required to be Pledged Accounts and shall
not be required to be subject to Pledged Account Letters;

 

(b)           each Grantor will (i) immediately instruct each Person
obligated at any time to make any payment to such Grantor for any reason (an “Obligor”)
to make such payment to a Pledged Account of such Grantor or to a Cash
Concentration Account and (ii) deposit in a Pledge Account or pay to the
Administrative Agent for deposit in a Cash Concentration Account, at the end of
each Business Day, all proceeds of Collateral and all other cash of such
Grantor in excess of $250,000 in the aggregate;

 

(c)           concurrently with or promptly after entering into a Pledged
Account Letter with any Pledged Account Bank, each Grantor will instruct such
Pledged Account Bank to transfer to a Cash Concentration Account, at the end of
each Business Day, in same day funds, an amount equal to the credit balance of
the Pledged Account in such Pledged Account Bank.  If any Grantor shall fail to give any such
instructions to any Pledged Account Bank, the Administrative Agent may do so
without further notice to any Grantor;

 

(d)           each Grantor agrees that it will not add any bank as a
Pledged Account Bank or add any account as a Pledged Account to those listed in
Schedule 8 hereto, unless the Administrative Agent shall have received at
least 10 days’ prior written notice of such addition and shall have received a
Pledged Account Letter executed by such new Pledged Account Bank and such
Grantor or a supplement to an existing Pledged Account Letter covering such new
Pledged Account, as the case may be (and, upon the receipt by the
Administrative Agent of such Pledged Account Letter or supplement, Schedule 8
hereto shall be automatically amended to include such Pledged Account Bank or
Pledged Account).  Each

 

 

Grantor agrees that it will not terminate any bank as a Pledged Account
Bank or terminate any account as a Pledged Account, unless the Administrative
Agent shall have received at least 10 days’ prior written notice of such
termination (and, upon such termination, Schedule 8 hereto shall be
automatically amended to delete such Pledged Account Bank or Pledged Account);

 

(e)           upon any termination of any Pledged Account Letter or other
agreement with respect to the maintenance of a Pledged Account by any Grantor
or any Pledged Account Bank, such Grantor will immediately notify all Obligors
that were making payments to such Pledged Account to make all future payments
to another Pledged Account or to a Cash Concentration Account.  If an Event of Default has occurred and is
continuing, each Grantor agrees to terminate any or all Pledged Accounts and
Pledged Account Letters upon request by the Administrative Agent;

 

(f)            the Grantors will draw checks
on, and otherwise withdraw amounts from, their respective operating accounts in
such amounts as may be required in the ordinary course of business (including,
without limitation, to pay or prepay Debt outstanding under the Loan
Documents).  So long as no Default under Section 7.01(a)
or (f) of the Credit Agreement or no Event of Default shall have occurred and
be continuing, the Administrative Agent will direct the applicable Collateral
Bank (as hereinafter defined) to transfer amounts on deposit in the Cash
Concentration Account maintained with such Collateral Bank to the respective
operating accounts to the extent necessary to pay all checks drawn on, and all
amounts otherwise withdrawn from, such operating accounts;

 

(g)           each Grantor agrees that it will not add any account as an
unblocked account and will not terminate any account as an unblocked account,
unless the Administrative Agent shall have received at least 10 days’ prior
written notice of such addition or termination; and

 

(h)           notwithstanding anything to the contrary in this Agreement,
with respect to the lock-box account of the U.S. Borrower maintained in London,
Ontario, Canada, the transfers required pursuant to Section 4.2(c) shall
be to the cash concentration account maintained by the Canadian Borrower under
the Canadian Security Agreement rather than to any Cash Concentration Account.

 

(i)            the Administrative Agent hereby
agrees with the Grantors that, unless a Default under Section 7.01(a) or
(f) of the Credit Agreement has occurred and is continuing, or an Event of
Default has occurred, the Administrative Agent shall not issue instructions
under the Pledged Account Letters.

 

4.3           Cash
Concentration Accounts.

 

(a)           So long as any of the Advances shall remain unpaid, any
Letter of Credit shall be outstanding, any Bank Hedge Agreement shall be in
effect or any of the Lender Parties shall have any Commitment under the Credit
Agreement:

 

(i)            the
U.S. Borrower will maintain its Cash Concentration Accounts with any commercial
bank reasonably acceptable to the Administrative Agent (each, a “Collateral
Bank”) in accordance with the terms of this Agreement and any existing Cash
Concentration Account Letters entered into pursuant to the Existing U.S.
Security Agreement and, within 90 days after the Closing Date, such other
letter agreements (such letter agreements, together with any Cash Concentration
Account Letters entered into pursuant to the Existing U.S. Security Agreement,
the “Cash Concentration Account Letters”), among the U.S. Borrower, the
relevant Collateral Bank and the Administrative Agent, which letter agreements
are to be in substantially the form of Exhibit C hereto or otherwise in form
and substance reasonably satisfactory to the Administrative Agent.  Upon the occurrence and continuance of a
Default under Section 7.01(a)

 

 

or (f) or the occurrence of an Event of Default, the Administrative
Agent shall have sole and exclusive dominion and control of the Cash
Concentration Accounts subject to the terms of this Agreement and of the Cash
Concentration Account Letters;

 

(ii)           it
shall be a term and condition of each Cash Concentration Account that no amount
(including, without limitation, interest on Cash Concentration Collateral
Investments related thereto) shall be paid or released to or for the account
of, or withdrawn by or for the account of, the U.S. Borrower or any other
Person from such Cash Concentration Account, except as otherwise provided in
Sections 4.2 and 7 hereof and in the applicable Cash Concentration Account
Letter;

 

(iii)          the
U.S. Borrower agrees that it will not add any bank as a Collateral Bank or add
any account as a Cash Concentration Account to that listed in Schedule 8
hereto, unless the Administrative Agent shall have received at least 10 days’
prior written notice of such addition and shall have received a Cash
Concentration Account Letter executed by such new Collateral Bank and the U.S.
Borrower or a supplement to an existing Cash Concentration Account Letter
covering such new Cash Concentration Account, as the case may be (and, upon the
receipt by the Administrative Agent of such new Cash Concentration Account
Letter or supplement, Schedule 8 hereto shall be automatically amended to
include such Collateral Bank or Cash Concentration Account).  The U.S. Borrower agrees that it will not
terminate any Collateral Bank as a Collateral Bank or terminate any account as
a Cash Concentration Account, unless the Administrative Agent shall have
received at least 10 days’ prior written notice of such termination (and, upon
such termination, Schedule 8 hereto shall be automatically amended to
delete such Collateral Bank or Cash Concentration Account); and

 

(iv)          the
Administrative Agent hereby agrees with the U.S. Borrower that, unless a
Default under Section 7.01(a) or (f) of the Credit Agreement has occurred
and is continuing, or an Event of Default has occurred, the Administrative
Agent shall not issue instructions under any Cash Concentration Account Letter.

 

(b)           So long as no Default under Section 7.01(a) or 7.01(f)
of the Credit Agreement or Event of Default has occurred and is continuing, the
U.S. Borrower may direct any Collateral Bank to (i) invest amounts on deposit
in the Cash Concentration Account maintained with such Collateral Bank in such
Cash Equivalents as the U.S. Borrower may select, in each case which
investments shall be made in the name of, and with the entitlement holder
being, the U.S. Borrower, and (ii) invest interest paid on the Cash Equivalents
referred to in clause (i) above, and reinvest other proceeds of any such Cash
Equivalents that may mature or be sold, in each case in such Cash Equivalents
as the U.S. Borrower may select, in each case which investments shall be made
in the name of, and with the entitlement holder being, the U.S. Borrower (the
Cash Equivalents referred to in clauses (i) and (ii) of this Section 4.3(b)
being, collectively, the “U.S. Borrower Collateral Investments”).

 

(c)           Upon the occurrence and during the continuance of a Default
under Section 7.01(a) or 7.01(f) of the Credit Agreement or an Event of
Default, the Administrative Agent may, subject to the provisions of Section 7,
from time to time (i) invest amounts on deposit in any Cash Concentration
Account in such Cash Equivalents as the Administrative Agent may select, in
each case which investments shall be made in the name of, and with the
entitlement holder being, the Administrative Agent, on behalf of the U.S.
Borrower, and (ii) invest interest paid on the Cash Equivalents referred to in
clause (i) above, and reinvest other proceeds of any such Cash Equivalents that
may mature or be sold, in such Cash Equivalents as the Administrative Agent may
select, in each case which investments shall be made in the name of, and with
the entitlement holder being, the Administrative Agent, on behalf of the U.S.
Borrower (the Cash Equivalents referred to in clauses (i) and (ii) of this Section 4.3(c),
together with

 

 

the U.S. Borrower Collateral Investments, being, collectively, the “Cash
Concentration Collateral Investments”).

 

(d)           Interest and proceeds that are not invested or reinvested in
Cash Concentration Collateral Investments as provided in subsection (b) or
(c) of this Section 4.3 shall be deposited and held in the applicable Cash
Concentration Account.

 

(e)           The Administrative Agent shall not have any liability to the
U.S. Borrower or any other Grantors or any of the Secured Parties for, or as a
result of, any losses suffered from any Cash Concentration Collateral
Investment made by it in accordance with this Section 4.3 or if the
earnings realized on any such Cash Concentration Collateral Investment are less
than otherwise could have been achieved had other Cash Equivalents been
selected by the U.S. Borrower or the Administrative Agent pursuant to the terms
of subsection (b) or (c), respectively, of this Section 4.3.

 

(f)            All of the Cash Concentration
Collateral Investments made in respect of each Cash Concentration Account and
all interest and income received thereon and therefrom, and the net proceeds
realized upon the maturity or sale thereof, shall be held in such Cash Concentration
Account as Collateral, which amounts may be released solely in accordance with
the provisions of Section 4.2 and Sections 7 hereof and of the applicable
Cash Concentration Account Letter.

 

4.4           Securities
Account.

 

(a)           At any time upon the occurrence and during the continuance
of a Default under Section 7.01(a) or (f) of the Credit Agreement, or upon
the occurrence of an Event of Default, in its sole discretion and without
notice to any Grantor, the Administrative Agent shall have the right at any
time to convert Collateral consisting of financial assets credited to the
Securities Account to Collateral consisting of financial assets held directly
by the Administrative Agent, and to convert Collateral consisting of financial
assets held directly by the Administrative Agent to Collateral consisting of
financial assets credited to the Securities Account.

 

(b)           With respect to any Collateral in which any Grantor has any
right, title or interest and that constitutes a security entitlement, such
Grantor will cause the securities intermediary with respect to such security
entitlement either (i) to identify in its records the Administrative Agent as
the entitlement holder of such security entitlement against such securities
intermediary or (ii) to agree in writing with such Grantor and the
Administrative Agent that such securities intermediary will comply with
entitlement orders (that is, notifications communicated to such securities
intermediary directing transfer or redemption of the financial assets to which
such Grantor has a security entitlement) originated by the Administrative Agent
without further consent of such Grantor, such agreement to be in substantially
the form of Exhibit D hereto or otherwise in form and substance satisfactory to
the Administrative Agent (such agreement, together with any Securities Account
Control Agreement entered into pursuant to the Existing U.S. Security
Agreement, being a “Securities Account Control Agreement”).

 

(c)           No Grantor will change or add any securities intermediary or
commodity intermediary that maintains any securities account or commodity
account in which any of the Collateral is credited or carried, or change or add
any such securities account or commodity account, in each case without first
complying with the above provisions of this Section 4.4 in order to
perfect the security interest granted hereunder in such Collateral.

 

(d)           The Administrative Agent hereby agrees with the Grantors
that, unless a Default under Section 7.01(a) or (f) of the Credit
Agreement has occurred and is continuing, or an Event of

 

 

Default has occurred, the Administrative Agent shall not issue
instructions under the Securities Account Control Agreement.

 

SECTION 5.           REPRESENTATIONS AND WARRANTIES

 

To induce the
Administrative Agent and the Lenders to enter into the Credit Agreement and
make Advances and issue Letters of Credit thereunder and to induce the Hedge
Banks to enter into Bank Hedge Agreements from time to time, each Grantor
hereby represents and warrants to the Administrative Agent and each Secured
Party that:

 

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

 

5.2           Perfected
First Priority Liens.  The security
interests granted pursuant to this Agreement (a)
upon (w) completion of the filings and other actions specified on Schedule 3
(which, in the case of all filings and other documents referred to on said
Schedule, have been delivered to the Administrative Agent in completed or duly
executed form), (x) the recordation of the Intellectual Property Security
Agreements referred to in Section 6.10(i) with the U.S. Patent and
Trademark Office and the U.S. Copyright Office, which Agreements have been, or
will be, duly recorded and are in full force and effect, (y) the execution of
the Control Agreements pursuant to this Agreement and (z) the recording of the
Lien of the Administrative Agent hereunder on the certificate of title for any
Equipment which is certificated in any state (which recording shall not be
required for any Equipment with a fair market value of less than $100,000) will
constitute valid and perfected security interests in all of the Collateral in
favor of the Administrative Agent, for the ratable benefit of the Lender
Parties, as collateral security for such Grantor’s Obligations, enforceable in
accordance with the terms hereof against all creditors of such Grantor and any
Persons purporting to purchase any Collateral from such Grantor and (b) are prior to all other Liens on the
Collateral except for Liens permitted by the Credit Agreement which have
priority over the Liens on the Collateral by operation of law.  All filings and other actions necessary to
perfect such security interest have been duly taken and are in full force and
effect or will be made or taken in accordance with the terms of the Loan
Documents, and all filing and recording fees and taxes related to any of the
foregoing have been or will upon each filing be duly paid in full.

 

5.3           Jurisdiction
of Organization; Chief Executive Office. 
On the date hereof, such Grantor’s jurisdiction of organization,
identification number from the jurisdiction of organization (if any), and the
location of such Grantor’s chief executive office or sole place of business or
principal residence, as the case may be, are specified on Schedule 4.  Such Grantor has furnished to the
Administrative Agent a certified charter, certificate of incorporation or other
organization document and long-form good standing certificate as of a date
which is recent to the date hereof.

 

 

5.4           Inventory
and Equipment.  (a)  Schedule 5 sets forth, as of the date
hereof, each jurisdiction where such Grantor owns or leases property or in
which the conduct of its business requires it to be qualified and in good
standing as a foreign corporation, except such jurisdictions where the failure
to be so qualified or in good standing has not had or would not reasonably be
likely to have a Material Adverse Effect. 
Such Grantor has exclusive possession and control of its Equipment and
Inventory other than (i) Inventory with an aggregate value not to exceed
$100,000 that is being processed by third-party processors pursuant to a
contract with a Grantor and (ii) Inventory stored at any leased premises or
warehouse for which a landlord’s or warehouseman’s agreement, in form and
substance reasonably satisfactory to the Administrative Agent, is in effect;
provided that the Grantors may store Inventory at the leased premises or
warehouse of any landlord or warehouseman without a landlord’s or warehouseman’s
agreement (x) for a period of 30 days after the Closing Date and (y) to the
extent that a landlord’s or warehouseman’s agreement is not obtained from such
landlord or warehouseman after the exercise by such Grantor of commercially
reasonable efforts.

 

(b)           The Inventory that has been produced or distributed by such
Grantor has been produced in compliance in all material respects with all
requirements of applicable law, including, without limitation, the Fair Labor
Standards Act.

 

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

 

5.6           Investment
Property.  (a)  The shares of Pledged Stock pledged by such
Grantor hereunder constitute all the issued and outstanding shares of all
classes of the Capital Stock of each Issuer owned by such Grantor or, in the
case of Foreign Subsidiary Voting Stock, if less, 66% of the outstanding
Foreign Subsidiary Voting Stock of each relevant Issuer.

 

(b)           All the shares of the Pledged Stock have been duly and
validly issued and, to the extent such Pledged Stock constitute shares of
stock, are fully paid and nonassessable, and, in the case of such Pledged Stock
issued by AKW LLC, Henderson LLC, and Accuride Erie, are not represented by
certificates.

 

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

 

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

 

5.7           Receivables.  (a)  No
amount payable to such Grantor under or in connection with any Receivable is
evidenced by any Instrument or Chattel Paper in an aggregate amount in excess
of $100,000 which has not been delivered to the Administrative Agent.

 

(b)           None of the obligors on any Receivables is a Governmental
Authority.

 

5.8           Contracts.  (a)  No
consent of any party (other than such Grantor) to any Contract is required, or
purports to be required, in connection with the execution, delivery and
performance of this Agreement, except as has been obtained.

 

 

(b)           Each Contract to which such Grantor is a party has been duly
authorized, executed and delivered by such Grantor and, to the knowledge of
such Grantor, all other parties thereto, and is in full force and effect and
constitutes a valid and legally enforceable obligation against such Grantor
and, to the knowledge of such Grantor, all other parties thereto in accordance
with its terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors’ rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing.

 

(c)           No consent or authorization of, filing with or other act by
or in respect of any Governmental Authority is required in connection with the
execution, delivery, performance, validity or enforceability of any of the
Contracts by any party thereto other than those which have been duly obtained,
made or performed, are in full force and effect and do not subject the scope of
any such Contract to any material adverse limitation, either specific or
general in nature.

 

(d)           Neither such Grantor nor (to the best of such Grantor’s
knowledge) any of the other parties to the Contracts is in default in the
performance or observance of any of the terms thereof.

 

(e)           Such Grantor has delivered to the Administrative Agent a
complete and correct copy of each Contract, including all amendments,
supplements and other modifications thereto.

 

(f)            No amount payable to such
Grantor under or in connection with any Contract is evidenced by any Instrument
or Chattel Paper in an aggregate amount in excess of $100,000 which has not
been delivered to the Administrative Agent.

 

5.9           Intellectual
Property.  (a)  Schedule 6 lists all Intellectual
Property owned by such Grantor in its own name on the date hereof.

 

(b)           On the date hereof, all material Intellectual Property is
valid, subsisting, unexpired and enforceable, has not been abandoned.  To the knowledge of such Grantor, the rights
of such Grantor in or to such Intellectual Property do not conflict with,
misappropriate or infringe upon the intellectual property rights of any third
party, and no claim has been asserted that the use of such Intellectual
Property does or may infringe upon the intellectual property rights of any
third party that could reasonably be expected to have a Material Adverse
Effect.  To the best of such Grantor’s
knowledge, no Person is engaging in any activity that infringes upon or
misappropriates the Intellectual Property or upon the rights of such Grantor
therein except for such matters as could not reasonably be expected to have a
Material Adverse Effect.

 

(c)           Except as set forth on Schedule 6, such Grantor has not
granted any license, release, covenant not to sue, non-assertion assurance, or
other right to any Person with respect to any part of the material Intellectual
Property except for those that do not interfere in any material respect with
the Grantor’s use thereof.

 

(d)           No holding, decision or judgment has been rendered by any
Governmental Authority which would limit, cancel or question the validity of,
or such Grantor’s rights in, any Intellectual Property in any respect that
could reasonably be expected to have a Material Adverse Effect.

 

(e)           Such Grantor has made or performed all filings, recordings
and other acts and has paid all required fees and taxes to maintain and protect
its interest in each and every material item of Intellectual Property in full
force and effect throughout the world in all jurisdictions reasonably necessary
for such Grantor’s use thereof, and to protect and maintain its interest therein
including, without limitation, recordations of any of its interests in the
Patents and Trademarks with the U.S. Patent and

 

 

Trademark Office and in corresponding national and international patent
offices, and recordation of any of its interests in the Copyrights with the
U.S. Copyright Office and in corresponding national and international copyright
offices.  Such Grantor has used proper
statutory notice in connection with its use of each material patent, trademark
and copyright of the Intellectual Property.

 

(f)            No action or proceeding is
pending, or, to the knowledge of such Grantor, threatened, on the date hereof
(i) seeking to limit, cancel or question the validity of any Intellectual
Property or such Grantor’s ownership interest therein, or (ii) which, if
adversely determined, would have a material adverse effect on the value of any
Intellectual Property except, in each case, for such matters that could not
reasonably be expected to have a Material Adverse Effect.

 

(g)           With respect to each material License:  (i) such License is valid and binding and in
full force and effect and represents the entire agreement between the
respective licensor and licensee with respect to the subject matter of such
License; (ii) such License will not cease to be valid and binding and in full
force and effect on terms identical to those currently in effect as a result of
the rights and interest granted herein, nor will the grant of such rights and
interest constitute a breach or default under such License or otherwise give
the licensor or licensee a right to terminate such License; (iii) such Grantor
has not received any notice of termination or cancellation under such License;
(iv) such Grantor has not received any notice of a breach or default under such
License, which breach or default has not been cured; (v) such Grantor has not
granted to any other third party any rights, adverse or otherwise, under such
License; and (vi) neither such Grantor nor any other party to such License is
in breach or default in any material respect, and no event has occurred that,
with notice or lapse of time or both, would constitute such a breach or default
or permit termination, modification or acceleration under such License.

 

(h)           To the best of such Grantor’s knowledge, except for such matters
as could not reasonably be expected to have a Material Adverse Effect, (i) none
of the Trade Secrets of such Grantor has been used, divulged, disclosed or
appropriated to the detriment of such Grantor for the benefit of any other
Person other than such Grantor; (ii) no employee, independent contractor or
agent of such Grantor has misappropriated any Trade Secrets of any other Person
in the course of the performance of his or her duties as an employee,
independent contractor or agent of such Grantor; and (iii) no employee,
independent contractor or agent of such Grantor is in default or breach of any
term of any employment agreement, non-disclosure agreement, assignment of
inventions agreement or similar agreement or contract relating in any way to the
protection, ownership, development, use or transfer of such Grantor’s
Intellectual Property.

 

5.10         Commercial
Tort Claims.  (a)  On the date hereof, except to the extent
listed in Section 3 above, no Grantor has rights in any Commercial Tort
Claim with potential value in excess of $100,000.

 

(b)           Upon the filing of a financing statement covering any
Commercial Tort Claim referred to in Section 6.11 hereof against such
Grantor in the jurisdiction specified in Schedule 3 hereto, the security
interest granted in such Commercial Tort Claim will constitute a valid
perfected security interest in favor of the Administrative Agent, for the
ratable benefit of the Secured Parties, as collateral security for such Grantor’s
Obligations, enforceable in accordance with the terms hereof against all
creditors of such Grantor and any Persons purporting to purchase such
Collateral from Grantor, which security interest shall be prior to all other
Liens on such Collateral except for unrecorded liens permitted by the Credit
Agreement which have priority over the Liens on such Collateral by operation of
law.

 

5.11         Accounts.  Such Grantor has no Pledged Accounts, Cash
Concentration Accounts or other deposit accounts other than the Pledged
Accounts and the Cash Concentration Accounts listed on Schedule 8 hereto,
as such Schedule 8 may be amended from time to time pursuant to Section 4.2(d)
and

 

Section 4.3(a)(iii), and
the Petty Cash Accounts.  Such Grantor
has instructed all existing Obligors to make all payments to a Pledged Account.

 

5.12                           Consents.

 

(a)                                  The U.S. Borrower, as the sole
member of AKW LLC, hereby (i) consents, for purposes of Article 9 of the
AKW LLC Agreement, to the assignment and pledge hereunder of, and the grant
hereunder of security interest in, the Pledged Stock issued by AKW LLC and to
the assignment, sale or other disposition of such Pledged Stock pursuant to Section 7
hereof and the transferee of such assignment, sale or other disposition
becoming a Substituted Member under the AKW LLC Agreement and (ii) agrees that
the provisions of Sections 9.2 through 9.6 of the AKW LLC Agreement shall not
apply to the assignment or pledge hereunder of, or the grant hereunder of
security interest in, the Pledged Stock issued by AKW LLC, or the assignment,
sale or other disposition of such Pledged Stock pursuant to Section 7
hereof, and in that connection waive all of their rights under such provisions
with respect to such assignment, pledge and grant and such assignment, sale and
other disposition.

 

(b)                                 The U.S. Borrower, as limited
partner, and AKW LLC, as general partner, of Accuride Erie, hereby (i) consent,
for purposes of Article 9 of the Accuride Erie Limited Partnership
Agreement, to the assignment and pledge hereunder of, and the grant hereunder
of security interest in, the Pledged Stock issued by Accuride Erie and to the
assignment, sale or other disposition of such Pledged Stock pursuant to Section 7
hereof and the transferee of such assignment, sale or other disposition
becoming a Substituted Limited Partner under the Accuride Erie Limited
Partnership Agreement and (ii) agree that the provisions of Sections 9.2
through 9.6 of the Accuride Erie Limited Partnership Agreement shall not apply
to the assignment or pledge hereunder of, or the grant hereunder of security
interest in, the Pledged Stock issued by Accuride Erie, or the assignment, sale
or other disposition of such Pledged Stock pursuant to Section 7 hereof,
and in that connection waive all of their rights under such provisions with
respect to such assignment, pledge and grant and such assignment, sale and
other disposition.

 

(c)                                  The U.S. Borrower, as sole
member of Henderson LLC, hereby consents, for purposes of Section 12 of
the Henderson LLC Agreement, to the assignment and pledge hereunder of, and the
grant hereunder of security interests in, the Pledged Stock issued by Henderson
LLC and to the assignment, sale or other disposition of such Pledged Stock
pursuant to Section 7 hereof and the transferee of such assignment, sale
or other disposition becoming a Substituted Member under the Henderson LLC
Agreement.

 

5.13                           Representations
and Warranties in the Credit Agreement. 
Each of the representations and warranties set forth in Section 4.01
of the Credit Agreement that is made by either Borrower with respect to such
Guarantor is correct in all material respects.

 

SECTION 6.                                COVENANTS

 

Each Grantor
covenants and agrees with the Administrative Agent and the Lenders that, from
and after the date of this Agreement until the Obligations (other than
Unmatured Surviving Obligations) shall have been paid in full, no Letter of
Credit shall be outstanding and the Commitments shall have terminated:

 

6.1                                 Delivery
of Instruments, Certificated Securities and Chattel Paper.  If any amount payable under or in connection
with any of the Collateral shall be or become evidenced by any Instrument,
Certificated Security or Chattel Paper in an aggregate amount in excess of
$100,000, such Instrument, Certificated Security or Chattel Paper shall be
immediately delivered to the Administrative

 

 

Agent, duly indorsed in a
manner reasonably satisfactory to the Administrative Agent, to be held as
Collateral pursuant to this Agreement.

 

6.2                                 Maintenance
of Insurance.  (a)  Such Grantor will maintain, with financially
sound and reputable companies, insurance policies (i) insuring the Inventory,
Equipment and Vehicles against loss by fire, explosion, theft and such other
casualties as may be reasonably satisfactory to the Administrative Agent and
(ii) insuring such Grantor and the Administrative Agent against liability for
personal injury and property damage relating to such Inventory, Equipment and
Vehicles, such policies to be in such form and amounts and having such coverage
as may be reasonably satisfactory to the Administrative Agent.  Each policy of each Grantor for liability
insurance shall provide for all losses to be paid on behalf of the
Administrative Agent and such Grantor as their interests appear, and each
policy for property damage insurance shall provide for all losses (except for
losses of less than $500,000 per occurrence) to be paid directly to the
Administrative Agent.

 

(b)                                 All such insurance shall (i)
provide that at least 10 days’ prior written notice of cancellation, material
reduction or lapse be given to the Administrative Agent of written notice
thereof, (ii) name the Administrative Agent as insured party or loss payee, as
applicable and (iii) be reasonably satisfactory in all other respects to the
Administrative Agent.

 

(c)                                  If requested by the
Administrative Agent, the U.S. Borrower shall deliver to the Administrative
Agent as often as the Administrative Agent may reasonably request a report of a
reputable insurance broker with respect to such insurance.

 

(d)                                 Reimbursement under any
liability insurance maintained by any Grantor pursuant to this Section 6.2
may be paid directly to the Person who shall have incurred liability covered by
such insurance.  In case of any loss
involving damage to Equipment or Inventory when subsection (e) of this Section 6.2
is not applicable, the applicable Grantor will make or cause to be made the
necessary repairs to or replacements of such Equipment or Inventory, and any
proceeds of insurance properly received by or released to such Grantor shall be
used by such Grantor, except as otherwise required hereunder or by the Credit
Agreement, to pay or as reimbursement for the costs of such repairs or
replacements.

 

(e)                                  So long as no Event of Default
shall have occurred and be continuing, all insurance payments received by the
Administrative Agent in connection with any loss, damage or destruction of any
Inventory or Equipment will be released by the Administrative Agent to the
applicable Grantor, and such payments shall be applied as required pursuant to Section 2.06(b)(ii)
of the Credit Agreement.

 

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

 

6.4                                 Transfers;
Maintenance of Perfected Security Interest; Further Documentation.  (a) 
Such Grantor will not convey, transfer, sell, assign (by operation of
law or otherwise) or otherwise dispose of, or grant any option or other right
to purchase or otherwise acquire, any of the Collateral, except for such
conveyances, sales, transfers, assignments and dispositions that are permitted
under the Loan Documents.

 

 

(b)                                 Such Grantor shall maintain the
security interest created by this Agreement as a perfected security interest
having at least the priority described in Section 5.2 and shall defend
such security interest against the claims and demands of all Persons
whomsoever, subject to the rights of such Grantor under the Loan Documents to
dispose of the Collateral.

 

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

 

(d)                                 At any time and from time to
time, upon the written request of the Administrative Agent, and at the sole
expense of such Grantor, such Grantor will promptly and duly execute and
deliver, and have recorded, such further instruments and documents and take
such further actions as the Administrative Agent may reasonably request for the
purpose of obtaining or preserving the full benefits of this Agreement and of
the rights and powers herein granted, including, without limitation, (i) filing
any financing or continuation statements under the Uniform Commercial Code (or
other similar laws) in effect in any jurisdiction with respect to the security
interests created hereby and (ii) in the case of Investment Property, Deposit
Accounts, Letter-of-Credit Rights and any other relevant Collateral, taking any
actions necessary to enable the Administrative Agent to obtain “control”
(within the meaning of the applicable Uniform Commercial Code) with respect
thereto.

 

6.5                                 Changes
in Name, etc.  Such Grantor will not,
except upon 30 days’ prior written notice to the Administrative Agent and
delivery to the Administrative Agent of all additional financing statements and
other executed documents reasonably requested by the Administrative Agent to
maintain the validity, perfection and priority of the security interests
provided for herein, (i) change its jurisdiction of organization or principal
residence from that referred to in Section 5.3 or (ii) change its name.

 

6.6                                 Notices.  Such Grantor will advise the Administrative
Agent and the Lender Parties promptly, in reasonable detail, of:

 

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

 

(b)                                 any loss or damage exceeding
$1,000,000 to any of the Equipment or Inventory of such Grantor;

 

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

 

6.7                                 Investment
Property.  (a)  If such Grantor shall become entitled to
receive or shall receive any certificate (including, without limitation, any
certificate representing a dividend or a distribution in connection with any
reclassification, increase or reduction of capital or any certificate issued in
connection with any reorganization), option or rights in respect of the Capital
Stock of any Issuer, whether in addition to, in substitution of, as a
conversion of, or in exchange for, any shares of the Pledged Stock, or
otherwise in respect thereof, such Grantor shall accept the same as the agent
of the Administrative Agent and the Lender Parties, hold the same in trust for
the Administrative Agent and the Lender Parties and promptly deliver the same
to the Administrative Agent in the exact form received, duly indorsed by such
Grantor to the Administrative Agent, if required, together with an undated
stock power covering such certificate duly executed in blank by such Grantor,
to be held by the Administrative Agent, subject to the terms hereof, as
additional collateral security for the Obligations.  If the

 

 

Administrative Agent so
requests at any time when an Event of Default has occurred and is continuing,
any sums paid upon or in respect of the Investment Property upon the
liquidation or dissolution of any Issuer shall be paid over to the
Administrative Agent to be held by it hereunder as additional collateral
security for the Obligations, and in case any distribution of capital shall be
made on or in respect of the Investment Property or any property shall be
distributed upon or with respect to the Investment Property pursuant to the
recapitalization or reclassification of the capital of any Issuer or pursuant
to the reorganization thereof, the property so distributed shall, unless
otherwise subject to a perfected security interest in favor of the
Administrative Agent, be delivered to the Administrative Agent to be held by it
hereunder as additional collateral security for the Obligations.  If any sums of money or property so paid or
distributed in respect of the Investment Property is required to be delivered
to the Administrative Agent shall be received by such Grantor, such Grantor
shall, until such money or property is paid or delivered to the Administrative
Agent, hold such money or property in trust for the Administrative Agent and
the Lender Parties, segregated from other funds of such Grantor, as additional
collateral security for the Obligations.

 

(b)                                 Without the prior written
consent of the Administrative Agent, such Grantor will not (i) vote to enable,
or take any other action to permit, any Issuer to issue any Capital Stock of
any nature or to issue any other securities convertible into or granting the
right to purchase or exchange for any Capital Stock of any nature of any Issuer
(except pursuant to a transaction permitted by the Credit Agreement), (ii) sell,
assign, transfer, exchange, or otherwise dispose of, or grant any option with
respect to, the Investment Property or Proceeds thereof (except pursuant to a
transaction permitted by the Credit Agreement), (iii) create, incur or permit
to exist any Lien or option in favor of, or any claim of any Person with
respect to, any of the Investment Property or Proceeds thereof, or any interest
therein, except for the security interests created by this Agreement and other
Liens permitted by the Credit Agreement or (iv) enter into any agreement or
undertaking restricting the right or ability of such Grantor or the
Administrative Agent to sell, assign or transfer any of the Investment Property
or Proceeds thereof (except pursuant to a transaction permitted by the Credit
Agreement).

 

(c)                                  In the case of each Grantor
which is an Issuer, such Issuer agrees that (i) it will be bound by the terms
of this Agreement relating to the Investment Property issued by it and will
comply with such terms insofar as such terms are applicable to it and (ii) the
terms of Section 7.3(d) shall apply to it, mutatis  mutandis,
with respect to all actions that may be required of it pursuant to Section 7.3(d)
with respect to the Investment Property issued by it.

 

(d)                                 In the case of the Pledged Stock
of the Canadian Borrower, the U.S. Borrower hereby agrees to deliver or cause
to be delivered to the Administrative Agent any consent required under the
articles of incorporation of the Canadian Borrower to the transfer of the
Pledged Stock of the Canadian Borrower to the Administrative Agent effected by Section 3
hereof, concurrently with the delivery of duly executed instruments of transfer
or assignment in blank in respect of such Pledged Stock in accordance with Section 6.7(a).

 

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

 

6.9                                 Contracts.  (a) 
Such Grantor will perform and comply in all material respects with all
its obligations under the Contracts.

 

 

(b)                                 Such Grantor will not amend,
modify, terminate or waive any provision of any Contract in any manner which
could reasonably be expected to materially adversely affect the value of such
Contract as Collateral.

 

(c)                                  Such Grantor will exercise
promptly and diligently each and every material right which it may have under
each Contract (other than any right of termination).

 

(d)                                 Such Grantor will deliver to the
Administrative Agent a copy of each material demand, notice or document
received by it relating in any way to any Contract that questions the validity
or enforceability of such Contract.

 

(e)                                  Such Grantor shall instruct the
obligor under each Contract to make all payments due or to become due under or
in connection with each Contract will be made directly to a Pledged Account.

 

6.10                           Intellectual
Property.  (a)  Such Grantor (either itself or through
licensees) will (i) continue to use each material Trademark on each and every
trademark class of goods applicable to its current line as reflected in its
current catalogs, brochures and price lists in order to maintain such Trademark
in full force free from any claim of abandonment for non-use, (ii) maintain as in
the past the quality of products and services offered under such Trademark,
(iii) use such Trademark with the appropriate notice of registration and all
other notices and legends required by applicable Requirements of Law, (iv) not
adopt or use any mark which is confusingly similar or a colorable imitation of
such Trademark unless the Administrative Agent, for the ratable benefit of the
Secured Parties, shall obtain a perfected security interest in such mark
pursuant to this Agreement, and (v) not (and not permit any licensee or
sublicensee thereof to) do any act or knowingly omit to do any act whereby such
Trademark may become invalidated or impaired in any material way.

 

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

 

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

 

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

 

(e)                                  Such Grantor will notify the
Administrative Agent immediately if it knows, or has reason to know, that any
application or registration relating to any material Intellectual Property may
become forfeited, abandoned or dedicated to the public, or of any adverse determination
or development (including, without limitation, the institution of, or any such
determination or development in, any proceeding in the United States Patent and
Trademark Office, the United States Copyright Office or any court or tribunal
in any country) regarding such Grantor’s ownership of, or the validity of, any
material Intellectual Property or such Grantor’s right to register the same or
to own and maintain the same.

 

(f)                                    Whenever such Grantor, either by
itself or through any agent, employee, licensee or designee, shall file an
application for the registration of any material Intellectual Property with the
United States Patent and Trademark Office, the United States Copyright Office
or any similar office or

 

 

agency in any other country or any political subdivision thereof, such
Grantor shall report such filing to the Administrative Agent within five
Business Days after the last day of the fiscal quarter in which such filing
occurs.  Upon request of the
Administrative Agent, such Grantor shall execute and deliver, and have
recorded, any and all agreements, instruments, documents, and papers as the
Administrative Agent may request to evidence the Administrative Agent’s and the
Secured Parties’ security interest in any Copyright, Patent or Trademark and
the goodwill and general intangibles of such Grantor relating thereto or
represented thereby.

 

(g)                                 Such Grantor will take all
reasonable and necessary steps, including, without limitation, in any
proceeding before the United States Patent and Trademark Office, the United
States Copyright Office or any similar office or agency in any other country or
any political subdivision thereof, to maintain and pursue each application (and
to obtain the relevant registration) and to maintain each registration of the
material Intellectual Property, including, without limitation, filing of
applications for renewal, affidavits of use and affidavits of incontestability.

 

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

 

(i)                                     With respect to its material
Intellectual Property, each Grantor agrees to execute an agreement, in
substantially the form set forth in Exhibit E hereto (an “Intellectual
Property Security Agreement”), for recording the security interest granted
hereunder to the Administrative Agent in such Intellectual Property with the
U.S. Patent and Trademark Office, the U.S. Copyright Office and any other
Governmental Authorities necessary to perfect the security interest hereunder
in such Intellectual Property.

 

6.11                           Commercial
Tort Claims.  (a)  If such Grantor shall obtain an interest in
any Commercial Tort Claim with a potential value in excess of $1,000,000, such
Grantor shall within 30 days of obtaining such interest sign and deliver
documentation reasonably acceptable to the Administrative Agent granting a
security interest under the terms and provisions of this Agreement in and to
such Commercial Tort Claim.

 

6.12                           Vehicles.  (a)  No
Vehicle, with a fair market value in excess of $100,000 and as to which the
Administrative Agent has requested that the actions described in Section 6.12(b)
be taken, shall be removed from the state which has issued the certificate of
title or ownership therefor for a period in excess of four months.

 

(b)                                 At any time upon the request of
the Administrative Agent subsequent to the date hereof, and with respect to any
Vehicles with a fair market value of at least $100,000 acquired by such Grantor
subsequent to the date hereof, within 30 days after the date of acquisition
thereof, all applications for certificates of title or ownership indicating the
Administrative Agent’s first priority security interest in the Vehicle covered
by such certificate, and any other necessary documentation, shall be filed in
each office in each jurisdiction which the Administrative Agent shall deem
advisable to perfect its security interests in such Vehicles.

 

6.13                           Covenants
in the Loan Documents.  Such Grantor
will perform and observe, and cause each of its Subsidiaries to perform and
observe, all of the terms, covenants and agreements set forth in the Loan
Documents that either Borrower has agreed to cause such Grantor to perform or
observe.

 

 

SECTION 7.                                REMEDIAL PROVISIONS

 

7.1                                 Certain
Matters Relating to Receivables.  (a)  If an Event of Default has occurred and is continuing,
the Administrative Agent shall have the right to make test verifications of the
Receivables in any manner and through any medium that it reasonably considers
advisable, and each Grantor shall furnish all such assistance and information
as the Administrative Agent may require in connection with such test
verifications.

 

(b)                                 The Administrative Agent hereby
authorizes each Grantor to collect such Grantor’s Receivables, subject to Section 4,
and upon written notice to such Grantor, the Administrative Agent may curtail
or terminate said authority at any time after the occurrence and during the
continuance of a Default under Section 7.01(a) or (f) of the Credit
Agreement or an Event of Default.  If
required by the Administrative Agent at any time after the occurrence and
during the continuance of a Default under Section 7.01(a) or (f) of the
Credit Agreement or an Event of Default, any payments of Receivables, when
collected by any Grantor, (i) shall be forthwith (and, in any event, within two
Business Days) deposited by such Grantor in the exact form received, duly
indorsed by such Grantor to the Administrative Agent if required, in a
Collateral Account maintained under the sole dominion and control of the
Administrative Agent, subject to withdrawal by the Administrative Agent for the
account of the Secured Parties only as provided in Section 7.5, and (ii)
until so turned over, shall be held by such Grantor in trust for the
Administrative Agent and the Secured Parties, segregated from other funds of
such Grantor.  Each such deposit of
Proceeds of Receivables shall be accompanied by a report identifying in
reasonable detail the nature and source of the payments included in the
deposit.

 

(c)                                  At the Administrative Agent’s
request, each Grantor shall deliver to the Administrative Agent all original
and other documents evidencing, and relating to, the agreements and
transactions which gave rise to the Receivables, including, without limitation,
all original orders, invoices and shipping receipts.

 

7.2                                 Communications
with Obligors; Grantors Remain Liable. 
(a)  If an Event of Default has
occurred and is continuing, the Administrative Agent in its own name or in the
name of others may at any time communicate with obligors under the Receivables
and parties to the Contracts to verify with them to the Administrative Agent’s
satisfaction the existence, amount and terms of any Receivables or Contracts.

 

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

 

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

 

 

7.3                                 Pledged
Stock.  (a)  Unless a Default under Section 7.01(a)
or (f) of the Credit Agreement shall have occurred and be continuing, or an
Event of Default shall have occurred and be continuing, and the Administrative
Agent shall have given notice to the relevant Grantor of the Administrative
Agent’s intent to exercise its corresponding rights pursuant to Section 7.3(c),
each Grantor shall be permitted to exercise all voting and corporate or other
organizational rights with respect to the Investment Property; provided,
however, that no vote shall be cast or corporate or other organizational
right exercised or other action taken which would impair the Collateral or
which would be inconsistent with or result in any violation of any provision of
the Credit Agreement, this Agreement or any other Loan Document.  The Administrative Agent shall execute and
deliver (or cause to be executed and delivered) to each Grantor all such
proxies and other instruments as such Grantor may reasonably request for the
purpose of enabling such Grantor to exercise the voting and other rights that
it is entitled to exercise pursuant to this Section 7.3(a).

 

(b)                                 Unless a Default under Section 7.01(a)
or (f) of the Credit Agreement shall have occurred and be continuing, or an Event
of Default shall have occurred and be continuing, and the Administrative Agent
shall have given notice to the relevant Grantor of the Administrative Agent’s
intent to exercise its corresponding rights pursuant to Section 7.3(c),
each Grantor shall be permitted to receive all cash dividends paid in respect
of the Pledged Stock and all payments made in respect of the Pledged Notes, to
the extent permitted in the Credit Agreement.

 

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

 

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

 

7.4                                 Proceeds
to be Turned Over To Administrative Agent. 
In addition to the rights of the Administrative Agent and the Secured
Parties specified in Section 7.1 with respect to payments of Receivables,
if an Event of Default shall occur and be continuing, and if the Administrative
Agent shall

 

 

so request, all Proceeds
received by any Grantor consisting of cash, checks and other near-cash items
shall be held by such Grantor in trust for the Administrative Agent and the
Secured Parties, segregated from other funds of such Grantor, and shall,
forthwith upon receipt by such Grantor, be turned over to the Administrative
Agent in the exact form received by such Grantor (duly indorsed by such Grantor
to the Administrative Agent, if required). 
All Proceeds received by the Administrative Agent hereunder shall be
held by the Administrative Agent in a Collateral Account maintained under its
sole dominion and control.  All Proceeds
while held by the Administrative Agent in a Collateral Account (or by such
Grantor in trust for the Administrative Agent and the Secured Parties) shall
continue to be held as collateral security for all the Obligations and shall
not constitute payment thereof until applied as provided in Section 7.5.

 

7.5                                 Application
of Proceeds.  If an Event of Default
shall have occurred and be continuing, the Administrative Agent may apply all
or any part of Proceeds constituting Collateral, whether or not held in any
Collateral Account, and any proceeds of the guarantee set forth in Section 2,
in payment of the Obligations in the following order:

 

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

 

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

 

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

 

Fourth, any balance
remaining after the Obligations (other than Unmatured Surviving Obligations)
shall have been paid in full, no Letters of Credit shall be outstanding, no
Bank Hedge Agreement shall remain in effect and the Commitments shall have
terminated shall be paid over to the Borrowers or to whomsoever may be lawfully
entitled to receive the same.

 

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

 

 

Administrative Agent shall
reasonably select, whether at such Grantor’s premises or elsewhere.  The Administrative Agent shall apply the net
proceeds of any action taken by it pursuant to this Section 7.6, after
deducting all reasonable costs and expenses of every kind incurred in
connection therewith or incidental to the care or safekeeping of any of the
Collateral or in any way relating to the Collateral or the rights of the
Administrative Agent and the Secured Parties hereunder, including, without
limitation, reasonable attorneys’ fees and disbursements, to the payment in
whole or in part of the Obligations, in such order as the Administrative Agent
may elect, and only after such application and after the payment by the
Administrative Agent of any other amount required by any provision of law,
including, without limitation, Section 9-615(a)(3) of the New York UCC,
need the Administrative Agent account for the surplus, if any, to any
Grantor.  To the extent permitted by
applicable law, each Grantor waives all claims, damages and demands it may
acquire against the Administrative Agent or any Secured Party arising out of
the exercise by them of any rights hereunder. 
If any notice of a proposed sale or other disposition of Collateral
shall be required by law, such notice shall be deemed reasonable and proper if
given at least 10 days before such sale or other disposition.

 

(b)                                 If the Administrative Agent
proceeds to exercise its right to sell any or all of the Investment Property,
each of the Grantors shall, upon the written request of the Administrative
Agent therefor, furnish to the Administrative Agent all such information as the
Administrative Agent may reasonably request in order to determine the number of
limited liability company membership interests, partnership interests, shares
and other instruments included in such Investment Property that may be sold by
the Administrative Agent in transactions exempt under the Securities Act or any
similar laws in effect from time to time in any other relevant jurisdiction.

 

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

 

7.7                                 Acknowledgments
Relating to Investment Property and Account Collateral.  (a) 
Each Grantor recognizes and hereby acknowledges that, by reason of
certain prohibitions contained in the Securities Act and applicable state
securities laws (or other similar laws of other relevant jurisdictions), the Administrative
Agent may be compelled with respect to any sale of all or any part of the
Investment Property comprised of limited liability company membership
interests, partnership interests, shares or other equity interests or other
securities that are not registered under the Securities Act to limit the
purchasers thereof to those Persons who will agree, among other things, to
acquire the Investment Property for their own account, for investment and not
with a view to the distribution or resale thereof.  Each Grantor hereby further acknowledges that
any such private sale may be at a price and on terms less favorable to the
Administrative Agent and the other Secured Parties than those obtainable
through a public sale without such restrictions (including, without limitation,
a public offering made pursuant to a registration statement under the
Securities Act) and, notwithstanding such circumstances, such Grantor hereby
agrees that any private sale conducted in accordance with the New York UCC
shall be deemed to have been made in a commercially reasonable manner and that
the Administrative Agent shall have no obligation to engage in public sales and
no obligation to delay the sale of any Investment property for the period of
time necessary to permit the issuer thereof to register it for a form of public
sale requiring

 

 

registration under the
Securities Act or any applicable state securities laws (or other similar law of
other relevant jurisdictions), even if such Grantor would agree to do so.  Each Grantor hereby waives any claims against
the Administrative Agent arising by reason of the fact that the price at which
any Investment property may have been sold at such a private sale was less than
the price that might have been obtained at a public sale, even if the
Administrative Agent accepts the first offer received and does not offer such
Investment Property to more than one offeree.

 

(b)                                 The Administrative Agent may
sell or liquidate (and each of the Borrowers and the other Grantors hereby
irrevocably instructs the Administrative Agent, without any further action by
or notice to or from any such Grantor, to so sell or liquidate) all or any
portion of the Collateral Investments held in or in respect of any of the Cash
Collateral Accounts at any time following the occurrence and during the
continuance of an Event of Default to the extent required to satisfy of all or
any part of the Borrower Obligations, and the Administrative Agent shall not
have any liability to any of the Grantors, any of the other Secured Parties or
any other Person for, or as a result of, any losses suffered from any such sale
or liquidation.

 

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

 

SECTION 8.                                THE ADMINISTRATIVE AGENT

 

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

 

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

 

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

 

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

 

 

(iv)                              execute, in connection with any sale provided
for in Section 7.6 or 7.7, any indorsements, assignments or other
instruments of conveyance or transfer with respect to the Collateral; and

 

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

 

Anything in this Section 8.1(a) to the contrary notwithstanding,
the Administrative Agent agrees that it will not exercise any rights under the
power of attorney provided for in this Section 8.1(a) unless a Default
under Sections 7.01(a) or 7.01(f) of the Credit Agreement shall have occurred
and be continuing or an Event of Default shall have occurred and be continuing.

 

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

 

(c)                                  The expenses of the
Administrative Agent incurred in connection with actions undertaken as provided
in this Section 8.1, together with interest thereon at a rate per annum
equal to the highest rate per annum at which interest would then be payable on
any category of past due U.S. Revolving Credit Advances that are Base Rate
Advances under the Credit Agreement, from the date of payment by the
Administrative Agent to the date reimbursed by the relevant Grantor, shall be
payable by such Grantor to the Administrative Agent on demand.

 

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

 

8.2                                 Duty
of Administrative Agent.  The
Administrative Agent’s sole duty with respect to the custody, safekeeping and
physical preservation of the Collateral in its possession, under Section 9-207
of

 

 

the New York UCC or otherwise,
shall be to deal with it in the same manner as the Administrative Agent deals
with similar property for its own account. 
Neither the Administrative Agent, any Secured Party nor any of their
respective officers, directors, employees or agents shall be liable for failure
to demand, collect or realize upon any of the Collateral or for any delay in
doing so or shall be under any obligation to sell or otherwise dispose of any
Collateral upon the request of any Grantor or any other Person or to take any
other action whatsoever with regard to the Collateral or any part thereof.  The powers conferred on the Administrative
Agent and the Secured Parties hereunder are solely to protect the
Administrative Agent’s and the Secured Parties’ interests in the Collateral and
shall not impose any duty upon the Administrative Agent or any Secured Party to
exercise any such powers.  The
Administrative Agent and the Secured Parties shall be accountable only for
amounts that they actually receive as a result of the exercise of such powers,
and neither they nor any of their officers, directors, employees or agents shall
be responsible to any Grantor for any act or failure to act hereunder, except
for their own gross negligence or willful misconduct.

 

8.3                                 Execution
of Financing Statements.  Pursuant to
any applicable law, each Grantor authorizes the Administrative Agent to file or
record financing statements and other filing or recording documents or
instruments with respect to the Collateral without the signature of such
Grantor in such form and in such offices as the Administrative Agent determines
appropriate to perfect the security interests of the Administrative Agent under
this Agreement.  Each Grantor authorizes
the Administrative Agent to use the collateral description “all personal
property” in any such financing statements. 
Each Grantor hereby ratifies and authorizes the filing by the
Administrative Agent of any financing statement with respect to the Collateral
made prior to the date hereof.

 

8.4                                 Authority
of Administrative Agent.  Each
Grantor acknowledges that the rights and responsibilities of the Administrative
Agent under this Agreement with respect to any action taken by the
Administrative Agent or the exercise or non-exercise by the Administrative
Agent of any option, voting right, request, judgment or other right or remedy
provided for herein or resulting or arising out of this Agreement shall, as
between the Administrative Agent and the Secured Parties, be governed by the
Credit Agreement and by such other agreements with respect thereto as may exist
from time to time among them, but, as between the Administrative Agent and the
Grantors, the Administrative Agent shall be conclusively presumed to be acting
as agent for the Secured Parties with full and valid authority so to act or
refrain from acting, and no Grantor shall be under any obligation, or entitlement,
to make any inquiry respecting such authority.

 

SECTION 9.                                MISCELLANEOUS

 

9.1                                 Amendments
in Writing.  None of the terms or
provisions of this Agreement may be waived, amended, supplemented or otherwise
modified except in accordance with Section 9.01 of the Credit Agreement.

 

9.2                                 Notices.  All notices, requests and demands to or upon
the Administrative Agent or any Grantor hereunder shall be effected in the
manner provided for in Section 9.02 of the Credit Agreement; provided
that any such notice, request or demand to or upon any Guarantor shall be
addressed to such Guarantor at its notice address set forth on Schedule 1.

 

9.3                                 No
Waiver by Course of Conduct; Cumulative Remedies.  Neither the Administrative Agent nor any
Secured Party shall by any act (except by a written instrument pursuant to Section 9.1),
delay, indulgence, omission or otherwise be deemed to have waived any right or
remedy hereunder or to have acquiesced in any Default or Event of Default.  No failure to exercise, nor any delay in exercising,
on the part of the Administrative Agent or any Secured Party, any right, power
or privilege hereunder shall operate as a waiver thereof.  No single or partial exercise of any right,
power or privilege hereunder

 

 

shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.  A waiver by the Administrative Agent or any
Secured Party of any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy which the Administrative Agent or
such Secured Party would otherwise have on any future occasion.  The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not exclusive of
any other rights or remedies provided by law.

 

9.4                                 Enforcement
Expenses; Indemnification.  (a)  Each Guarantor agrees to pay or reimburse
each Secured Party and the Administrative Agent for all its costs and expenses
incurred in collecting against such Guarantor under the guarantee contained in Section 2
or otherwise enforcing or preserving any rights under this Agreement and the
other Loan Documents to which such Guarantor is a party, including, without
limitation, the reasonable fees and disbursements of counsel (including the
allocated fees and expenses of in-house counsel) to each Secured Party and of
counsel to the Administrative Agent.

 

(b)                                 Each Guarantor agrees to pay,
and to save the Administrative Agent and the Secured Parties harmless from, any
and all liabilities with respect to, or resulting from any delay in paying, any
and all stamp, excise, sales or other taxes which may be payable or determined
to be payable with respect to any of the Collateral or in connection with any
of the transactions contemplated by this Agreement.

 

(c)                                  Each Guarantor agrees to pay,
and to save the Administrative Agent and the Secured Parties harmless from, any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery, enforcement, performance
and administration of this Agreement to the extent any Borrower would be
required to do so pursuant to Section 9.04 of the Credit Agreement.

 

(d)                                 The agreements in this Section 9.4
shall survive repayment of the Obligations and all other amounts payable under
the Credit Agreement, the other Loan Documents and the Bank Hedge Agreements.

 

9.5                                 Successors
and Assigns.  This Agreement shall be
binding upon the successors and assigns of each Grantor and shall inure to the
benefit of the Administrative Agent and the Secured Parties and their
successors and assigns; provided that, except in a transaction permitted
pursuant to the Credit Agreement, no Grantor may assign, transfer or delegate
any of its rights or obligations under this Agreement without the prior written
consent of the Administrative Agent.

 

9.6                                 Set-Off.  Upon (a) the occurrence and during the
continuance of any Event of Default and (b) the making of the request or the
granting of the consent specified by Section 7.01 of the Credit Agreement
to authorize the Administrative Agent to declare the Notes due and payable
pursuant to the provisions of said Section 7.01, each Grantor hereby
irrevocably authorizes the Administrative Agent and each Lender Party at any
time and from time to time, to the fullest extent permitted by law, to set-off
and appropriate and apply any and all deposits (general or special, time or
demand, provisional or final), in any currency, and any other indebtedness at
any time held or owing by the Administrative Agent or such Lender Party to or
for the credit or the account of such Grantor, or any part thereof in such
amounts as the Administrative Agent or such Lender Party may elect, against and
on account of the obligations and liabilities of such Grantor to the
Administrative Agent or such Lender Party hereunder, under the Credit Agreement
or any other Loan Document or otherwise, as the Administrative Agent or such
Lender Party may elect, whether or not the Administrative Agent or any Lender
Party has made any demand for payment and although such obligations,
liabilities and claims may be contingent or unmatured.  The Administrative Agent and each Lender
Party shall notify such Grantor promptly of any such set-off and the application
made by the Administrative Agent or such Lender Party of the proceeds thereof, provided

 

 

that the failure to give such
notice shall not affect the validity of such set-off and application.  The rights of the Administrative Agent and
each Lender Party under this Section 9.6 are in addition to other rights
and remedies (including, without limitation, other rights of set-off) which the
Administrative Agent or such Lender Party may have.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(b)                                 consents that any such action or
proceeding may be brought in such courts and waives any objection that it may
now or hereafter have to the venue of any such action or proceeding in any such
court or that such action or proceeding was brought in an inconvenient court
and agrees not to plead or claim the same;

 

(c)                                  agrees that service of process
in any such action or proceeding may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar form of mail),
postage prepaid, to such Grantor at its address referred to in Section 9.2
or at such other address of which the Administrative Agent shall have been
notified pursuant thereto;

 

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

 

 

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

 

9.13                           Acknowledgements.  Each Grantor hereby acknowledges that:

 

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

 

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

 

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

 

9.14                           Additional
Grantors.  Each Subsidiary of the
U.S. Borrower that is required to become a party to this Agreement pursuant to Section 5.01(j)
of the Credit Agreement shall become a Grantor for all purposes of this
Agreement upon execution and delivery by such Subsidiary of an Assumption
Agreement in the form of Annex 1 hereto.

 

9.15                           Releases.  (a)  At
such time as the Advances, the reimbursement obligations in respect of Letters
of Credit and the other Obligations (other than Unmatured Surviving
Obligations) shall have been paid in full, the Commitments have been
terminated, no Bank Hedge Agreement shall remain in effect and no Letters of
Credit shall be outstanding, the Collateral shall be released from the Liens
created hereby, and this Agreement and all obligations (other than those
expressly stated to survive such termination) of the Administrative Agent and
each Grantor hereunder shall terminate, all without delivery of any instrument
or performance of any act by any party, and all rights to the Collateral shall
revert to the Grantors.  At the request
and sole expense of any Grantor following any such termination, the
Administrative Agent shall deliver to, or as directed by, such Grantor any
Collateral held by the Administrative Agent hereunder, and execute and deliver
to such Grantor such documents as such Grantor shall reasonably request to
evidence such termination.

 

(b)                                 If any of the Collateral shall
be sold, transferred or otherwise disposed of by any Grantor in a transaction
permitted by the Credit Agreement, then the Administrative Agent, at the
request and sole expense of such Grantor, shall execute and deliver to such
Grantor all releases or other documents reasonably necessary or desirable for the
release of the Liens created hereby on such Collateral.  If the Capital Stock of such Guarantor shall
be sold, transferred or otherwise disposed of in a transaction permitted by the
Credit Agreement, such Grantor shall be released from its obligations hereunder;
provided that (i) at the time of and after giving pro forma effect to
such request and release, no Default shall have occurred and be continuing,
(ii) the U.S. Borrower shall have delivered to the Administrative Agent, at
least three Business Days prior to the date of the proposed release, a written
request for release identifying the relevant Guarantor, together with a
certification by the U.S. Borrower stating that such transaction is in
compliance with the Credit Agreement and the other Loan Documents and (iii) the
Net Cash Proceeds of any such sale, transfer or other disposition shall be
applied to prepay the Advances, and reduce the Commitments, outstanding at such
time in accordance with, and to the extent required under, Section 2.06(b)
of the Credit Agreement.

 

 

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

 

 

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

 

	
   

  	
  ACCURIDE CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Terrence J. Keating

  
	
   

  	
   

  	
  Name:

  	
  Terrence J. Keating

  
	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ACCURIDE CUYAHOGA FALLS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Terrence J. Keating

  
	
   

  	
   

  	
  Name:

  	
  Terrence J. Keating

  
	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ACCURIDE ERIE L.P.

  
	
   

  	
   

  
	
   

  	
  By: AKW GENERAL PARTNER
  L.L.C., AS

     GENERAL PARTNER

  
	
   

  	
   

  
	
   

  	
  By: ACCURIDE CORPORATION,
  AS

     MEMBER

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Terrence J. Keating

  
	
   

  	
   

  	
  Name:

  	
  Terrence J. Keating

  
	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ACCURIDE HENDERSON LIMITED

  LIABILITY COMPANY

  
	
   

  	
   

  
	
   

  	
  By: ACCURIDE CORPORATION,
  AS

     MEMBER

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Terrence J. Keating

  
	
   

  	
   

  	
  Name:

  	
  Terrence J. Keating

  
	
   

  	
   

  	
  Title:

  	
  President

  

 

 

	
   

  	
  ACCURIDE TEXAS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Terrence J. Keating

  
	
   

  	
   

  	
  Name:

  	
  Terrence J. Keating

  
	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AKW GENERAL PARTNER L.L.C.

  
	
   

  	
   

  
	
   

  	
  By: ACCURIDE CORPORATION,
  AS

     MEMBER

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Terrence J. Keating

  
	
   

  	
   

  	
  Name:

  	
  Terrence J. Keating

  
	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ERIE LAND HOLDING, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Elizabeth I. Hamme

  
	
   

  	
   

  	
  Name:

  	
  Elizabeth I. Hamme

  
	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BOSTROM HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Terrence J. Keating

  
	
   

  	
   

  	
  Name:

  	
  Terrence J. Keating

  
	
   

  	
   

  	
  Title:

  	
  Chairman

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BOSTROM SEATING, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Terrence J. Keating

  
	
   

  	
   

  	
  Name:

  	
  Terrence J. Keating

  
	
   

  	
   

  	
  Title:

  	
  Chairman

  

 

 

	
   

  	
  BOSTROM SPECIALTY SEATING, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Terrence J. Keating

  
	
   

  	
   

  	
  Name:

  	
  Terrence J. Keating

  
	
   

  	
   

  	
  Title:

  	
  Chairman

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BRILLION IRON WORKS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Terrence J. Keating

  
	
   

  	
   

  	
  Name:

  	
  Terrence J. Keating

  
	
   

  	
   

  	
  Title:

  	
  Chairman

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FABCO AUTOMOTIVE CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Terrence J. Keating

  
	
   

  	
   

  	
  Name:

  	
  Terrence J. Keating

  
	
   

  	
   

  	
  Title:

  	
  Chairman

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GUNITE CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Terrence J. Keating

  
	
   

  	
   

  	
  Name:

  	
  Terrence J. Keating

  
	
   

  	
   

  	
  Title:

  	
  Chairman

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GUNITE EMI CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Terrence J. Keating

  
	
   

  	
   

  	
  Name:

  	
  Terrence J. Keating

  
	
   

  	
   

  	
  Title:

  	
  Chairman

  

 

 

	
   

  	
  IMPERIAL GROUP HOLDING CORP. - 1

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Terrence J. Keating

  
	
   

  	
   

  	
  Name:

  	
  Terrence J. Keating

  
	
   

  	
   

  	
  Title:

  	
  Chairman

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  IMPERIAL GROUP HOLDING CORP. - 2

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Terrence J. Keating

  
	
   

  	
   

  	
  Name:

  	
  Terrence J. Keating

  
	
   

  	
   

  	
  Title:

  	
  Chairman

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  IMPERIAL GROUP, L.P.

  
	
   

  	
   

  
	
   

  	
  By: IMPERIAL
  GROUP HOLDING CORP. – 1, ITS

      GENERAL PARTNER

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Terrence J. Keating

  
	
   

  	
   

  	
  Name:

  	
  Terrence J. Keating

  
	
   

  	
   

  	
  Title:

  	
  Chairman

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  JAII MANAGEMENT COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Terrence J. Keating

  
	
   

  	
   

  	
  Name:

  	
  Terrence J. Keating

  
	
   

  	
   

  	
  Title:

  	
  Chairman

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TRANSPORTATION
  TECHNOLOGIES

  INDUSTRIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Terrence J. Keating

  
	
   

  	
   

  	
  Name:

  	
  Terrence J. Keating

  
	
   

  	
   

  	
  Title:

  	
  Chairman

  

 

 

	
   

  	
  TRUCK COMPONENTS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Terrence J. Keating

  
	
   

  	
   

  	
  Name:

  	
  Terrence J. Keating

  
	
   

  	
   

  	
  Title:

  	
  ChairmanExhibit 
10.01

 

THE
SECURITIES REPRESENTED BY THIS AGREEMENT ARE OFFERED FOR INVESTMENT ONLY AND
HAVE NOT BEEN REGISTERED PURSUANT TO THE PROVISIONS OF THE SECURITIES ACT OF
1933 FROM REGISTRATION AS AMENDED (“SECURITIES ACT”), AND HAVE BEEN OFFERED AND
SOLD IN RELIANCE UPON THE EXEMPTION, SPECIFIED IN SECTION 4(2) OF THE
SECURITIES ACT AND RULE 506 OF REGULATION D PROMULGATED PURSUANT THERETO.  WITHOUT SUCH REGISTRATION, SUCH SECURITIES
MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE
DISPOSED OF, EXCEPT UPON DELIVERY TO THE COMPANY AND ITS TRANSFER AGENT OF AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY AND ITS TRANSFER AGENT THAT SUCH
REGISTRATION IS NOT REQUIRED FOR SUCH TRANSFER; OR THE SUBMISSION TO THE
COMPANY OR ITS TRANSFER AGENT OF SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO
THE COMPANY AND ITS TRANSFER AGENT TO THE EFFECT THAT ANY SUCH TRANSFER SHALL
NOT BE IN VIOLATION OF THE SECURITIES ACT, APPLICABLE STATE SECURITIES LAWS OR
ANY RULE OR REGULATION PROMULGATED PURSUANT THERETO.

 

	
  No.
  WC-1-2004

  	
   

  	
  1,100,000 Warrants

  

 

WARRANTS TO PURCHASE

1,100,000 SHARES OF

A.C.T. HOLDINGS, INC.

COMMON STOCK

WARRANT CERTIFICATE

 

Date of Issuance:  December 30,
2004

 

WARRANT AGREEMENT

 

This Warrant Certificate certifies that Quantum Merchant
Bankers, LLC, or registered assigns, in consideration of $3,520.08
received, is the registered holder of Warrants (the “Warrants”) to purchase
initially, at any time from December 30, 2005 (the “Effective Date”) until 5:30
p.m. Los Angeles time, on December 30, 2014 (“Expiration Date”), up to the
number of fully paid and nonassessable shares of common stock (“Common Stock”)
of A.C.T. Holdings, Inc., a Nevada corporation (the “Company”) set forth above,
at the initial exercise price, subject to adjustment in certain events, of $0.85 per share (the “Exercise Price”) of Common Stock upon
surrender of this Warrant Certificate and payment of the Exercise Price at an
office or agency of the Company, but subject to the conditions set forth
herein.

 

The
Warrants are subject to the following provisions, terms and conditions:

 

1

 

1.
EXERCISE OF WARRANTS

 

Exercise of Warrants.
The Warrants may be exercised by the Holder, in whole or in part (but not as to
a fractional share of Common Stock), by surrender of this Warrant Agreement at
the principal office of the Company located at 38 Plantation Street, Worcester,
MA 01605 (or such other office or agency of the Company as may be designated by
notice in writing to the Holder at the address of such Holder appearing on the
books and records of the Company), with the appropriate form attached hereto
duly exercised, at any time within the period beginning on the date of this
Warrant Agreement, which is specified above and ending on that date exactly ten
(10) years from the Effective Date (the “Exercise Period”) and (i) by certified
or official bank check or (ii) by surrender to the Company for cancellation of
a portion of these Warrants representing that number of unissued shares of  Common Stock underlying these Warrants which
is equal to the quotient obtained by dividing (A) the product obtained by
multiplying the Exercise Price by the number of shares of such Common  Stock being purchased upon such exercise by
(B) the difference obtained by subtracting the Exercise Price from the average
of the bid and asked prices on the date of exercise (the “Per Share Market
Value”) as of the date of such exercise. In any case where the consideration
payable upon such exercise is being paid in whole or in part pursuant to the
provisions of clause (ii) of this subsection (b), such exercise shall be
accompanied by written notice from the Holder of these Warrants specifying the
manner of payment thereof and containing a calculation showing the number of
such shares of Common Stock with respect to which rights are being surrendered
thereunder and the net number of shares to be issued after giving effect to
such surrender.  The Company agrees that
the shares of Common Stock so purchased shall be deemed to be issued to the
Holder as the record owner of such shares of Common Stock as of the close of
business on the date on which the Warrant Agreement shall have been surrendered
and payment made for such shares of Common Stock. Certificates representing the
shares of Common Stock so purchased shall be delivered to the Holder promptly
and in no event later than thirty (30) days after the Warrants shall have been
so exercised.

 

2.
ADJUSTMENTS AND NOTICES

 

A.  Adjustments.
The Exercise Price and the number of shares of Common Stock issuable upon
exercise of each Warrant shall be subject to adjustment from time to time, as
follows:

 

(1)                                 Stock
Dividends; Stock Splits; Reverse Stock Splits; and Reclassifications. In
the event that the Company shall (a) pay a dividend with respect to its capital
stock in shares of Common Stock, (b) subdivide its issued and outstanding
shares of Common Stock, (c) combine its issued and outstanding shares of common
stock into a smaller number of shares of any class of Common Stock or (d) issue
any shares of its capital stock in a reclassification of the Common Stock
(including any such reclassification in connection with a merger, consolidation
or other business combination in which the Company is the continuing

 

2

 

                                                corporation)
(any one of which actions is herein referred to as an “Adjustment Event”), the
number of shares of Common Stock purchasable upon exercise of each Warrant
immediately prior to the record date for such Adjustment Event shall be
adjusted so that the Holder shall thereafter be entitled to receive the number
of shares of Common Stock or other securities of the Company (such other
securities thereafter enjoying the rights of shares of Common Stock pursuant to
this Warrant Agreement) that such Holder would have owned or have been entitled
to receive after the happening of such Adjustment Event, had such Warrant been
exercised immediately prior to the happening of such Adjustment Event or any
record date with respect thereto. An adjustment made pursuant to this Section
2A(1) shall become effective immediately after the effective date of such
Adjustment Event retroactive to the record date, if any, for such Adjustment
Event.

 

(2)                                 Adjustment
of Exercise Price. Whenever the number of shares of Common Stock
purchasable upon the exercise of each Warrant is adjusted pursuant to Section
2A(1) of this Warrant Agreement, the Exercise Price for each share of Common
Stock payable upon exercise of each Warrant shall be adjusted by multiplying
such Exercise Price immediately prior to such adjustment by a fraction, the
numerator of which shall be the number of shares of Common Stock purchasable
upon the exercise of each Warrant immediately prior to such adjustment, and the
denominator of which shall be the number of shares of Common Stock so
purchasable immediately thereafter.

 

(3)                                 De
Minimis Adjustments. No adjustment in the number of shares of Common Stock
purchasable pursuant to this Warrant Agreement shall be required, unless such
adjustment would require an increase or decease of at least one percent (1%) in
the number of shares of Common Stock purchasable upon an exercise of each
Warrant; provided, however, that any adjustments which by reason of this
Section 2A(3) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations shall be made to
the nearest full share.

 

B.  Notice of Adjustment. Whenever
the number of shares of Common Stock purchasable upon the exercise of each
Warrant or the Exercise Price is adjusted, as herein provided, the Company
shall promptly notify the Holder in writing (such writing referred to as an “Adjustment
Notice”) of such adjustment or adjustments and shall deliver to the Holder a
certificate of a firm of independent public accountants selected by the Board
of Directors of the Company (who may be the regular accountants employed by the
Company) or of the Independent Financial Expert, if any, which makes a
determination of Current Market Value with respect to any such adjustment
setting forth the number of shares of Common Stock purchasable upon the
exercise of each Warrant and the Exercise Price after such adjustment, setting
forth a brief statement of the facts requiring such adjustment and setting
forth the computation by which such adjustment was made.

 

3

 

C.   Amendment of Warrant Agreement. This Warrant Agreement may not be changed
because of any change in the Exercise Price or in the number of shares of
Common Stock purchasable upon the exercise of a Warrant. The Company may at the
time in the Company’s sole discretion make any change in the form of a warrant
agreement that the Company may deem appropriate and that does not affect the
substance thereof and any warrant agreement thereafter issued, whether in
exchange or substitution for any outstanding warrant agreement or otherwise,
may be in the form so changed.

 

D.   Notice to Holder of Record Date,
Dissolution, Liquidation or Winding Up. The Company shall cause to be mailed (by
first class mail, postage prepaid) to the Holder notice of the record date for
any dividend, distribution or payment, in cash or in kind (including, without
limitation, evidence of indebtedness and assets), with respect to shares of
Common Stock at least twenty (20) calendar days before any such date. In the
event that at any time after the date hereof, there shall be a voluntary or
involuntary dissolution, liquidation or winding up of the Company, then the
Company shall cause to be mailed (by first class mail, postage prepaid) to the
Holder at the Holder’s address as shown on the books of the Company, at the
earliest practicable time (and, in any event, not less than twenty (20)
calendar days before any date set for definitive action), notice of the date on
which such dissolution, liquidation or winding up shall take place, as the case
may be. The notices referred to above shall also specify the date as of which
the holders of the shares of Common Stock of record or other securities
underlying the Warrants shall be entitled to receive such dividend, money or
the property deliverable upon such dissolution, liquidation or winding up, as
the case may be (the “Entitlement Date”). In the case of a distribution of
evidence of indebtedness or assets (other than in dissolution, liquidation or
winding up), if the Holder elects to exercise the Warrants in accordance with
Section 1 of this Warrant Agreement and become a holder of the Common Stock on
the Entitlement Date, the Holder shall thereafter receive the evidence of
indebtedness or assets distributed in respect of shares of Common Stock.

 

E.   Fractional Interest.
The Company shall not be required to issue fractional shares of Common Stock on
the exercise of the Warrants. If more than one Warrant shall be presented for
exercise in full at the same time by the same holder, the number of full shares
of Common Stock which shall be issuable upon such exercise shall be computed on
the basis of the aggregate number of whole shares of Common Stock purchasable
on exercise of the Warrants so presented. If any fraction of a share of Common
Stock would, except for the provisions of this Section 2E be issuable on the
exercise of the Warrants (or specified proportion thereof), the Company shall pay
an amount in cash calculated by it to be equal to the then fair value of one
share of Common Stock, as determined by the Board of Directors of the Company
in good faith, multiplied by such fraction computed to the nearest whole cent.

 

3.
RESERVATION AND AUTHORIZATION OF COMMON STOCK

 

The
Company covenants and agrees (a) that all shares of Common Stock which may be
issued upon the exercise of the Warrants will, upon issuance, be validly
issued, fully paid

 

4

 

and
nonassessable and free of all insurance or transfer taxes, liens and charges
with respect to the issue thereof; (b) that during the Exercise Period, the
Company will at all times have authorized, and reserved for the purpose of
issue or transfer upon exercise of the Warrants, sufficient shares of Common
Stock to provide for the exercise of the Warrants, and (c) that the Company
will take all such action as may be necessary to ensure that the shares of
Common Stock issuable upon the exercise of the Warrants may be so issued
without violation of any applicable law or regulation, or any requirements of
any domestic securities exchange upon which any capital stock of the Company
may be listed; provided, however, that nothing contained herein shall impose upon
the Company any obligation to register the Warrants or the Common Stock
pursuant to applicable securities laws. In the event that any securities of the
Company, other than the Common Stock, are issuable upon exercise of the
Warrants, the Company will take or refrain from taking any action referred to
in clauses (a) through (c) of this Section 3 as though such clauses applied,
mutatis mutandis, to such other securities then issuable upon the exercise the
Warrants.

 

4. NO
VOTING RIGHTS

 

This
Warrant Agreement shall not entitle the Holder to any voting rights or other
rights as a stockholder of the Company.

 

5.  CALL OF WARRANTS BY THE COMPANY.

 

The
Company shall have the right to force the purchase, at the Exercise Price, of
any or all Warrants on or after the date (the “Call Date”) on which: (i) the
price (“price” shall be determined by taking the average between the bid and
ask prices over the preceding five (5) day period) of the Company’s common
stock as reported on the Over the Counter Bulletin Board, or other nationally
recognized exchange, as the case may be, equals or exceeds 150% of the Exercise
Price; and (ii) the average trading volume of the Company’s common stock on the
Over the Counter Bulletin Board or other nationally recognized exchange, as the
case may be, equals or exceeds 20,000 shares per day over the previous thirty
(30) day period (collectively, the “Conditions to Call”). Should the Company
determine that the Conditions to Call have been satisfied, the Company shall
provide the Holder with written notice of its intent to call the Warrants. The
Holder shall have ten (10) days from the date appearing on such notice to
exercise the Warrants as specified herein and tender the Exercise Price to the
Company. If the Holder fails to exercise the warrants within the specified
period, all Warrants issued in the name of Holder shall, without any other
action by the Company, terminate.

 

6.  EXERCISE OR TRANSFER OF WARRANTS OR COMMON
STOCK

 

The
Holder agrees to be obligated by any and all provisions with respect to any and
all limitations, including limitations imposed by the Securities Act of 1933,
as amended, regarding the Warrants and the shares of Common Stock or other
securities issuable upon exercise of the Warrants. The Holder acknowledges and
agrees that he or she is aware that there are substantial restrictions on the
transferability of the Warrants and the shares

 

5

 

of
Common Stock or other securities issuable upon exercise of the Warrants. The undersigned
also acknowledges and agrees that he or she shall be responsible for compliance
with all conditions on transfer imposed by a Securities Administrator of any
state, province or territory and for any expenses incurred by the Company for
legal and accounting services in connection with reviewing such a proposed
transfer and issuing opinions in connection therewith.

 

7.
LOCK-UP PROVISION

 

In
the event that the Board of Directors of the Company determines, in its sole
and absolute discretion, that it is in the best interests of the Company and
its shareholders to cause Holder to execute a lockup/leak-out agreement related
to the common stock underlying the Warrants (whether such underlying common
stock is registered or not), Holder specifically agrees to execute such an
agreement as presented by the Company. 
The terms and conditions of such lockup/leak-out agreement, if
necessary, shall be set by the Company, in its sole and absolute discretion,
and will include, but not be limited to, at least a twelve (12) month
lockup/leak-out provision. In the event that Holder refuses to execute the
lockup/leak-out agreement (which may be a condition precedent to the issuance
of the stock underlying the Warrants), the Holder herewith specifically agrees
that the Company may refuse to issue the common stock issuable upon exercise of
the Warrants.

 

8.  PIGGY-BACK REGISTRATION RIGHTS

 

Subject
to the exceptions specified in this Section 8, in the event that the Company
decides to file a registration statement with the Securities and Exchange
Commission  pursuant to the Securities
Act, the Company shall provide Holder with written notice of its intent to file
a registration statement. Holder will then have fifteen (15) days from the date
appearing on the notice to request, in writing, that the Company use its best
efforts to include in that registration statement, for registration, all or any
portion of the common stock issuable upon exercise of these Warrants. If Holder
does not provide the Company with written notice within fifteen (15) days,
Holder loses Holder’s right to request registration of the shares issuable upon
the exercise of these Warrants. If proper notice is given, the Company agrees
to use its best efforts to prepare and file with the Securities and Exchange
Commission such amendments and supplements to the registration statement and
the prospectus used in connection with such registration statement necessary to
comply with the provisions of the Securities Act and to cause such registration
statement to become effective. The Company shall pay all expenses and fees
incurred by Holder in registering all or any portion of the shares issuable
upon exercise of these Warrants. The exceptions to the piggy-back registration
rights granted herein (i.e., Holder will not have the right to request that the
Company register the common stock underlying the Warrants) are as follows: (i)
the registration statement filed by the Company is related or a condition to a
secondary offering conducted by the Company; or (ii) the registration statement
filed by the Company seeks to register stock whose aggregate value (exclusive
of the common stock issuable upon exercise of the Warrants) is less than Ten
Million Dollars ($10,000,000).

 

6

 

9.
MERGERS, CONSOLIDATIONS, ETC.

 

A.
Except as may otherwise be provided, if the Company shall merge or consolidate
with another corporation, the Holder shall thereafter have the right, upon
exercise of the rights specified in this Warrant Agreement and payment of the
Exercise Price, to receive solely the kind and amount of shares of stock
(including, if applicable, Common Stock), other securities, property or cash or
any combination thereof receivable by a holder of the number of shares of
Common Stock for which this Warrant Agreement might have been exercised
immediately prior to such merger or consolidation (assuming, if applicable,
that the holder of such Common Stock failed to exercise its rights of election,
if any, as to the kind or amount of shares of stock, other securities, property
or cash or combination thereof receivable upon such merger or consolidation).

 

B. In case of any
reclassification or change of the shares of Common Stock issuable upon exercise
of (other than elimination or par value, a change in par value, or from par
value to no par value, or as the result of a subdivision or combination of
shares (which is provided for elsewhere herein), but including any
reclassification of the shares of Common stock into two (2) or more classes or series
of shares) or in case of any merger or consolidation of another corporation
into the Company in which the Company is the surviving corporation and in which
there is a reclassification or change of the shares of Common Stock (other than
a change in par value, or from par value to no par value, or as a result of a
subdivision or combination (which is provided for elsewhere herein), but
including any reclassification of the shares of Common Stock, the Holder shall
thereafter have the right, upon exercise hereof and payment of the Exercise
Price, to receive solely the kind and amount of shares of stock (including, if
applicable, Common Stock), other securities, property or cash or any
combination thereof receivable upon such reclassification, change, merger or
consolidation by a holder of the number of shares of Common Stock for which the
rights specified in this Warrant Agreement might have been exercised
immediately prior to such reclassification, change, merger or consolidation
(assuming, if applicable, that the holder of such Common Stock failed to
exercise its rights of election, if any, as to the kind or amount of shares of
stock, other securities, property or cash or combination thereof receivable
upon such reclassification, change, merger or consolidation).

 

10.
RIGHTS AND OBLIGATIONS SURVIVE EXERCISE OF WARRANTS

 

The
rights and obligations of the Company, of the Holder, and of the holders of
shares of Common Stock or other securities issued upon exercise of the
Warrants, specified in this Warrant Agreement shall survive the exercise of the
Warrants.

 

Dated:
December 30, 2004

 

COMPANY

 

A.C.T.
HOLDINGS, INC.,

 

7

 

A
Nevada corporation

 

 

	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  David
  C. Merrell

  	
   

  
	
  Its:

  	
  President

  	
   

  
	
   

  	
   

  
	
  HOLDER

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Signature
  of Holder)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Print
  Name of Holder)

  	
   

  
					

 

8

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