Document:

<PAGE>
                                                                    Exhibit 10.3

                              HYPERCOM CORPORATION

                                  COMMON STOCK

                          REGISTRATION RIGHTS AGREEMENT

                                                                 August 13, 2003

To Each of the Purchasers Named
on the Signature Pages Hereof

Ladies and Gentlemen:

         George R. Wallner (the "Seller") proposes to sell to the Purchasers (as
defined herein) upon the terms set forth in the Stock Purchase Agreement (as
defined herein) 7,000,000 shares of the common stock, par value $0.001 per share
(the "Securities") of Hypercom Corporation, a Delaware corporation (the
"Company"). As an inducement to the Purchasers to enter into the Stock Purchase
Agreement and in satisfaction of a condition to the obligations of the
Purchasers thereunder, the Company agrees with the Purchasers for the benefit of
holders (as defined herein) from time to time of the Registrable Securities (as
defined herein) as follows:

         1. Definitions. (a) Capitalized terms used herein without definition
shall have the meanings ascribed thereto in the Stock Purchase Agreement. As
used in this Agreement, the following defined terms shall have the following
meanings:

         "Affiliate" of any specified person means any other person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with such specified person. For purposes of this definition, control of
a person means the power, direct or indirect, to direct or cause the direction
of the management and policies of such person whether by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

         "Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in New York, New York are
authorized or obligated by law or executive order to close.

         "Commission" means the United States Securities and Exchange
Commission, or any other federal agency at the time administering the Exchange
Act or the Securities Act, whichever is the relevant statute for the particular
purpose.

         "Common Stock" means the Company's common stock, par value $0.001 per
share.
<PAGE>

         "Effectiveness Period" has the meaning assigned thereto in Section
2(b)(i) hereof.

         "Effective Time" means the date on which the Commission declares the
Shelf Registration Statement effective or on which the Shelf Registration
Statement otherwise becomes effective.

         "Electing Holder" has the meaning assigned thereto in Section 3(a)(ii)
hereof.

         "Exchange Act" means the United States Securities Exchange Act of 1934,
as amended.

         "holder" means, when used with respect to any Security, the record
holder of such Security.

         "Managing Underwriters" means the investment banker or investment
bankers and manager or managers that shall administer an underwritten offering,
if any, conducted pursuant to Section 6 hereof.

         "NASD Rules" means the Rules of the National Association of Securities
Dealers, Inc., as amended from time to time.

         "Notice and Questionnaire" means a Notice of Registration Statement and
Selling Securityholder Questionnaire, substantially in the form of Exhibit A
attached hereto, relating to the Securities.

         "person" means an individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.

         "Prospectus" means the prospectus (including, without limitation, any
preliminary prospectus, any final prospectus and any prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the Securities Act)
included in the Shelf Registration Statement, as amended or supplemented by any
prospectus supplement with respect to the terms of the offering of any portion
of the Registrable Securities covered by the Shelf Registration Statement and by
all other amendments and supplements to such prospectus, including all material
incorporated by reference in such prospectus and all documents filed after the
date of such prospectus by the Company under the Exchange Act and incorporated
by reference therein.

         "Purchasers" means the Purchasers named on the signature pages of the
Stock Purchase Agreement.

         "Registrable Securities" means only those Securities which are actually
sold by the Seller to the Purchasers pursuant to the Stock Purchase Agreement,
and any security issued thereon as a stock dividend, stock split or
recapitalization; provided, however, that a security ceases to be a Registrable
Security when it is no longer a Restricted Security.

                                      -2-
<PAGE>

         "Restricted Security" means any Security except any such Security that
(i) has been registered pursuant to an effective registration statement under
the Securities Act and sold in a manner contemplated by the Shelf Registration
Statement, (ii) has been transferred in compliance with Rule 144 under the
Securities Act (or any successor provision thereto) or is transferable pursuant
to paragraph (k) of such Rule 144 (or any successor provision thereto) or (iii)
has otherwise been transferred and a new Security not subject to transfer
restrictions under the Securities Act has been delivered by or on behalf of the
Company.

         "Rules and Regulations" means the published rules and regulations of
the Commission promulgated under the Securities Act or the Exchange Act, as in
effect at any relevant time.

         "Securities Act" means the United States Securities Act of 1933, as
amended.

         "Shelf Registration" means a registration effected pursuant to Section
2 hereof.

         "Shelf Registration Statement" means a "shelf" registration statement
filed under the Securities Act providing for the registration of, and the sale
on a continuous or delayed basis by the holders of, all of the Registrable
Securities pursuant to Rule 415 under the Securities Act and/or any similar rule
that may be adopted by the Commission, filed by the Company pursuant to the
provisions of Section 2 of this Agreement, including the Prospectus contained
therein, any amendments and supplements to such registration statement,
including post-effective amendments, and all exhibits and all material
incorporated by reference in such registration statement.

         "Stock Purchase Agreement" means the Stock Purchase Agreement, dated as
of August 13, 2003, between the Seller, the Company and the Purchasers.

         "underwriter" means any underwriter of Registrable Securities in
connection with an offering thereof under a Shelf Registration Statement.

         2. Shelf Registration. (a) The Company shall, (1) use its commercially
reasonable best efforts to file with the Commission within 15 days, but in no
event later than 30 calendar days after the Closing of the Stock Purchase
Agreement, a Shelf Registration Statement relating to the offer and sale of the
Registrable Securities and (2) use its commercially reasonable best efforts to
cause such Shelf Registration Statement to be declared effective under the
Securities Act on or prior to 120 calendar days after the Closing Date;
provided, however, that no holder shall be entitled to be named as a selling
securityholder in the Shelf Registration Statement or to use the Prospectus for
resales of Registrable Securities unless such holder is an Electing Holder.

         (b) The Company shall use all reasonable efforts:

                  (i) to keep the Shelf Registration Statement continuously
         effective in order to permit the Prospectus to be usable by holders for
         resales of Registrable Securities until the earlier of (A) the sale
         under the Shelf Registration Statement of all the Registrable
         Securities registered thereunder and (B) all of the Securities ceasing
         to

                                      -3-
<PAGE>

         be Restricted Securities (such period being referred to herein as the
         "Effectiveness Period"); and

                  (ii) after the Effective Time, promptly upon the request of
         any holder of Registrable Securities that is not then an Electing
         Holder, to take any action reasonably necessary to enable such holder
         to use the Prospectus for resales of Registrable Securities, including
         without limitation any action necessary to identify such holder as a
         selling securityholder in the Shelf Registration Statement; provided,
         however, that nothing in this subparagraph shall relieve such holder of
         the obligation to return a completed and signed Notice and
         Questionnaire to the Company in accordance with Section 3(a) hereof.

         3. Registration Procedures. In connection with the Shelf Registration
Statement, the following provisions shall apply:

                  (a) Not less than 30 calendar days prior to the Effective
         Time, the Company shall mail the Notice and Questionnaire to the
         holders of Registrable Securities. No holder shall be entitled to be
         named as a selling securityholder in the Shelf Registration Statement
         as of the Effective Time, and no holder shall be entitled to use the
         Prospectus for resales of Registrable Securities at any time unless
         such holder has returned a completed and signed Notice and
         Questionnaire to the Company by the deadline for response set forth
         therein; provided, however, holders of Registrable Securities shall
         have at least 20 calendar days from the date on which the Notice and
         Questionnaire is first mailed to such holders to return a completed and
         signed Notice and Questionnaire to the Company.

                           (i) After the Effective Time, the Company shall, upon
                  the request of any holder of Registrable Securities that is
                  not then an Electing Holder, promptly send a Notice and
                  Questionnaire to such holder. The Company shall not be
                  required to take any action to name such holder as a selling
                  securityholder in the Shelf Registration Statement or to
                  enable such holder to use the Prospectus for resales of
                  Registrable Securities until such holder has returned a
                  completed and signed Notice and Questionnaire to the Company.

                           (ii) The term "Electing Holder" shall mean any holder
                  of Registrable Securities that has returned a completed and
                  signed Notice and Questionnaire to the Company in accordance
                  with Section 3(a) hereof.

                  (b) The Company shall furnish to each Electing Holder, counsel
         to the Electing Holders, and the Managing Underwriters, if any, no
         fewer than five Business Days prior to the initial filing of the Shelf
         Registration Statement, a copy of such Shelf Registration Statement,
         and shall furnish to such holders, counsel to such holders, and the
         Managing Underwriters, if any, no fewer than two Business Days prior to
         the filing of any amendment or supplement to the Prospectus, a copy of
         such amendment or supplement and shall use all reasonable efforts to
         reflect in each such document when so filed with the Commission such
         comments as such holders and their respective counsel reasonably

                                      -4-
<PAGE>

         may propose; provided, however, that the Company shall make the final
         decision as to the form and content of each such document. If any such
         Shelf Registration Statement refers to any Electing Holder by name or
         otherwise as the holder of any securities of the Company, then such
         Electing Holder shall have the right to require (i) the insertion
         therein of language, in form and substance reasonably satisfactory to
         such Electing Holder, to the effect that the holding by such Electing
         Holder of such securities is not to be construed as a recommendation by
         such Electing Holder of the investment quality of the Company's
         securities covered thereby and that such holding does not imply that
         such Electing Holder will assist in meeting any future financial
         requirements of the Company or (ii) in the event that such reference to
         such Electing Holder by name or otherwise is not required by the
         Securities Act or any similar Federal statute then in force, the
         deletion of the reference to such Electing Holder in any amendment or
         supplement to the Registration Statement filed or prepared subsequent
         to the time that such reference ceases to be required.

                  (c) From the date hereof until the end of the Effective
         Period, the Company shall (subject to paragraph (j) below) promptly
         take such action as may be necessary so that (i) each of the Shelf
         Registration Statement and any amendment thereto and the Prospectus and
         any amendment or supplement thereto (and each report or other document
         incorporated by reference therein in each case) complies in all
         material respects with the Securities Act and the Exchange Act and the
         respective rules and regulations thereunder, (ii) each of the Shelf
         Registration Statement and any amendment thereto does not, when it
         becomes effective, contain an untrue statement of a material fact or
         omit to state a material fact required to be stated therein or
         necessary to make the statements therein, in light of the circumstances
         under which they were made, not misleading and (iii) each of the
         Prospectus and any amendment or supplement to the Prospectus does not
         at any time during the Effectiveness Period include an untrue statement
         of a material fact or omit to state a material fact necessary in order
         to make the statements therein, in the light of the circumstances under
         which they were made, not misleading.

                  (d) The Company shall promptly advise each Electing Holder,
         and shall confirm such advice in writing if so requested by any such
         holder (which notice pursuant to clauses (ii) through (iv) hereof shall
         be accompanied by an instruction to suspend the use of the Prospectus
         until the requisite changes have been made):

                           (i) when the Shelf Registration Statement and any
                  amendment thereto has been filed with the Commission and when
                  the Shelf Registration Statement or any post-effective
                  amendment thereto has become effective;

                           (ii) of the issuance by the Commission of any stop
                  order suspending the effectiveness of the Shelf Registration
                  Statement or the initiation of any proceedings for such
                  purpose;

                           (iii) of the receipt by the Company of any
                  notification with respect to the suspension of the
                  qualification of the securities included in the Shelf
                  Registration

                                      -5-
<PAGE>

                  Statement for sale in any jurisdiction or the initiation of
                  any proceeding for such purpose; and

                           (iv) if changes in the Shelf Registration Statement
                  or the Prospectus are required in order that the Shelf
                  Registration Statement and Prospectus do not contain an untrue
                  statement of a material fact and do not omit to state a
                  material fact required to be stated therein or necessary to
                  make the statements therein (in the case of the Prospectus, in
                  light of the circumstances under which they were made) not
                  misleading.

                  (e) The Company shall use all reasonable efforts to prevent
         the issuance, and if issued to obtain the withdrawal, of any order
         suspending the effectiveness of the Shelf Registration Statement at the
         earliest possible time.

                  (f) The Company shall furnish to each requesting Electing
         Holder, without charge, at least one copy of the Shelf Registration
         Statement and all post-effective amendments thereto, including
         financial statements and schedules, and, if such holder so requests in
         writing, all reports, other documents and exhibits that are filed with
         or incorporated by reference in the Shelf Registration Statement.

                  (g) The Company shall, during the Effectiveness Period,
         deliver to each Electing Holder, without charge, as many copies of the
         Prospectus (including each preliminary Prospectus) and any amendment or
         supplement thereto as such Electing Holder may reasonably request; and
         the Company consents (except during the continuance of any event
         described in Section 3(d)(iv) above or any pending corporate
         development described in Sections 3(j) and 6 below) to the use of the
         Prospectus and any amendment or supplement thereto by each of the
         Electing Holders in connection with the offering and sale of the
         Registrable Securities covered by the Prospectus and any amendment or
         supplement thereto during the Effectiveness Period.

                  (h) Prior to any offering of Registrable Securities pursuant
         to the Shelf Registration Statement, the Company shall (i) register or
         qualify or cooperate with the Electing Holders and a single counsel for
         the Electing Holders in connection with the registration or
         qualification of such Registrable Securities for offer and sale under
         the securities or "blue sky" laws of such jurisdictions within the
         United States as any Electing Holder may reasonably request, (ii) keep
         such registrations or qualifications in effect and comply with such
         laws so as to permit the continuance of offers and sales in such
         jurisdictions for so long as may be necessary to enable any Electing
         Holder or underwriter, if any, to complete its distribution of
         Registrable Securities pursuant to the Shelf Registration Statement,
         and (iii) take any and all other actions necessary or advisable to
         enable the disposition in such jurisdictions of such Registrable
         Securities; provided, however, that in no event shall the Company be
         obligated to (A) qualify as a foreign corporation or as a dealer in
         securities in any jurisdiction where it would not otherwise be required
         to so qualify but for this Section 3(h) or (B) file any general consent
         to service of process in any jurisdiction where it is not as of the
         date hereof so subject.

                                      -6-
<PAGE>

                  (i) The Company shall cooperate with the Electing Holders to
         facilitate the timely preparation and delivery of certificates
         representing Registrable Securities to be sold pursuant to the Shelf
         Registration Statement, which certificates shall not bear any
         restrictive legends and shall meet the requirements of any securities
         exchange on which the Company's Common Stock is then listed and which
         certificates shall be in such permitted denominations and registered in
         such names as Electing Holders may request in connection with the sale
         of Registrable Securities pursuant to the Shelf Registration Statement.

                  (j) Upon the occurrence of any fact or event contemplated by
         paragraph 3(d)(iv) above, the Company shall (subject to the next
         sentence) promptly prepare a post-effective amendment or supplement to
         the Shelf Registration Statement or the Prospectus, or any document
         incorporated therein by reference, or file any other required document
         so that, as thereafter delivered to purchasers of the Registrable
         Securities included therein, the Prospectus will not include an untrue
         statement of a material fact or omit to state any material fact
         necessary to make the statements therein, in the light of the
         circumstances under which they were made, not misleading. If the
         Company notifies the Electing Holders in accordance with clauses (ii)
         through (iv) of paragraph 3(d) above to suspend the use of the
         Prospectus until the requisite changes to the Prospectus have been
         made, then each Electing Holder shall suspend the use of the Prospectus
         until (i) such Electing Holder has received copies of the supplemented
         or amended Prospectus contemplated by the preceding sentence or (ii)
         such Electing Holder is advised in writing by the Company that the use
         of the Prospectus may be resumed and has received copies of any
         additional or supplemental filings that are incorporated by reference
         in the Prospectus. Notwithstanding the foregoing, the Company shall not
         be required to amend or supplement the Shelf Registration Statement,
         any related Prospectus or any document incorporated by reference for a
         period not to exceed 60 consecutive days (or 120 days in the aggregate
         in any calendar year) if there occurs or exists any pending corporate
         development the disclosure of which would, in the judgment of the
         Company, be harmful to the business, operations, prospects, or
         condition (financial or otherwise) of the Company and its subsidiaries,
         taken as a whole.

                  (k) The Company shall use all reasonable efforts to comply
         with all applicable Rules and Regulations, and to make generally
         available to its securityholders as soon as practicable, but in any
         event not later than eighteen months after (i) the effective date (as
         defined in Rule 158(c) under the Securities Act) of the Shelf
         Registration Statement, (ii) the effective date of each post-effective
         amendment to the Shelf Registration Statement, and (iii) the date of
         each filing by the Company with the Commission of an Annual Report on
         Form 10-K that is incorporated by reference in the Shelf Registration
         Statement, an earnings statement of the Company and its subsidiaries
         complying with Section 11(a) of the Securities Act and the Rules and
         Regulations of the Commission thereunder (including, at the option of
         the Company, Rule 158).

                  (l) In the event of an underwritten offering conducted
         pursuant to Section 6 hereof, the Company shall (subject to paragraph
         3(j) above), if requested, promptly include or incorporate in a
         Prospectus supplement or post-effective amendment to the

                                      -7-
<PAGE>

         Shelf Registration Statement such information as the Managing
         Underwriters reasonably agree should be included therein and to which
         the Company does not reasonably object and shall (subject to paragraph
         3(j) above) make all required filings of such Prospectus supplement or
         post-effective amendment as soon as practicable after it is notified of
         the matters to be included or incorporated in such Prospectus
         supplement or post-effective amendment.

                  (m) The Company shall enter into such customary agreements
         (including an underwriting agreement in customary form in the event of
         an underwritten offering conducted pursuant to Section 6 hereof) and
         take all other appropriate action in order to expedite and facilitate
         the registration and disposition of the Registrable Securities, and in
         connection therewith, if an underwriting agreement is entered into,
         cause the same to contain indemnification provisions and procedures
         substantially identical to those set forth in Section 5 hereof with
         respect to all parties to be indemnified pursuant to Section 5 hereof;
         provided, however, the Company shall not be required to facilitate an
         underwritten offering pursuant to the Shelf Registration Statement by
         any holders unless the offering relates to at least 25% of the
         Securities sold pursuant to the Stock Purchase Agreement.

                  (n) The Company shall:

                           (i) (A) make reasonably available for inspection by
                  requesting Electing Holders, any underwriter participating in
                  any disposition pursuant to the Shelf Registration Statement,
                  and any attorney selected in accordance with Section 4(b)
                  hereof, one accountant and any other agent retained by such
                  holders or any such underwriter all relevant financial and
                  other records, pertinent corporate documents and properties of
                  the Company and its subsidiaries and (B) cause the Company's
                  officers, directors and employees to supply all information
                  reasonably requested by such holders or any such underwriter,
                  attorney, accountant or agent in connection with the Shelf
                  Registration Statement, in each case, as is customary for
                  similar due diligence examinations; provided, however, that
                  all records, information and documents that are designated in
                  writing by the Company, in good faith, as confidential shall
                  be kept confidential by such holders and any such underwriter,
                  attorney, accountant or agent, unless such disclosure is made
                  in connection with a court proceeding or required by law, or
                  such records, information or documents become available to the
                  public generally or through a third party without an
                  accompanying obligation of confidentiality; and provided,
                  further that, if the foregoing inspection and information
                  gathering would otherwise disrupt the Company's conduct of its
                  business, such inspection and information gathering shall, to
                  the greatest extent possible, be coordinated on behalf of the
                  requesting Electing Holders and the other parties entitled
                  thereto by one counsel designated by and on behalf of Electing
                  Holders and other parties;

                           (ii) in connection with any underwritten offering
                  conducted pursuant to Section 6 hereof, make such
                  representations and warranties to the Electing Holders
                  participating in such underwritten offering and to the
                  Managing Underwriters, in

                                      -8-
<PAGE>

                  form, substance and scope as are customarily made by the
                  Company to underwriters in primary underwritten offerings of
                  equity securities;

                           (iii) in connection with any underwritten offering
                  conducted pursuant to Section 6 hereof, obtain opinions of
                  counsel to the Company (which counsel and opinions (in form,
                  scope and substance) shall be reasonably satisfactory to the
                  Managing Underwriters) addressed to each requesting Electing
                  Holder, covering such matters as are customarily covered in
                  opinions requested in primary underwritten offerings of equity
                  securities (it being agreed that the matters to be covered
                  shall include, without limitation, as of the date of the
                  opinion and as of the Effective Time or the date of the most
                  recent post-effective amendment thereto, as the case may be,
                  comment of such counsel as to the absence, to such counsel's
                  knowledge, from the Shelf Registration Statement and the
                  Prospectus, including the documents incorporated by reference
                  therein, of an untrue statement of a material fact or the
                  omission of a material fact required to be stated therein or
                  necessary to make the statements therein (in the case of the
                  Prospectus, in light of the circumstances under which they
                  were made,) not misleading;

                           (iv) in connection with any underwritten offering
                  conducted pursuant to Section 6 hereof, obtain "cold comfort"
                  letters and updates thereof from the independent public
                  accountants of the Company (and, if necessary, from the
                  independent public accountants of any subsidiary of the
                  Company or of any business acquired by the Company for which
                  financial statements and financial data are, or are required
                  to be, included in the Shelf Registration Statement),
                  addressed to each requesting Electing Holder (if such Electing
                  Holder has provided such letter, representations or
                  documentation, if any, required for such cold comfort letter
                  to be so addressed) and the underwriters, in customary form
                  and covering matters of the type customarily covered in "cold
                  comfort" letters in connection with primary underwritten
                  offerings;

                           (v) in connection with any underwritten offering
                  conducted pursuant to Section 6 hereof, deliver such documents
                  and certificates as may be reasonably requested by any
                  Electing Holders and the Managing Underwriters, if any,
                  including without limitation certificates to evidence
                  compliance with Section 3(j) hereof and with any conditions
                  contained in the underwriting agreement or other agreements
                  entered into by the Company in connection therewith.

                  (o) The Company will use all reasonable efforts to cause the
         Securities to be listed on the New York Stock Exchange or other stock
         exchange or trading system, if any, on which the Common Stock primarily
         trades on or prior to the Effective Time.

                  (p) The Company shall use all reasonable efforts to take all
         other steps necessary to effect the registration, offering and sale of
         the Registrable Securities covered by the Shelf Registration Statement
         contemplated hereby

                                      -9-
<PAGE>

                  (r) On or prior to the Effective Time, the Company shall cause
         the transfer agent to remove the restrictive legends on all Registrable
         Securities eligible for sale under the Shelf Registration Statement so
         that they are freely tradable.

         4. Registration Expenses. (a) All fees and expenses incident to the
performance of or compliance with this Agreement by the Company shall be borne
by it whether or not any Shelf Registration Statement is filed or becomes
effective and whether or not any securities are issued or sold pursuant to any
Shelf Registration Statement. The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (i) all registration and filing fees
(including without limitation fees and expenses (A) with respect to filings
required to be made with the National Association of Securities Dealers, Inc.
and (B) in compliance with securities or Blue Sky laws (including without
limitation and in addition to that provided for in (b) below, reasonable fees
and disbursements of counsel for the underwriters or counsel for the holders of
Registrable Securities in connection with Blue Sky qualifications of the
Registrable Securities )), (ii) printing expenses (including without limitation
expenses of printing certificates for Registrable Securities and of printing
Prospectuses if the printing of Prospectuses is requested by the Managing
Underwriters, if any), (iii) messenger, telephone and delivery expenses, (iv)
fees and disbursements of counsel for the Company and one counsel for the
holders of Registrable Securities, in accordance with the provisions of Section
4(b) hereof, (v) fees and disbursements of all independent certified public
accountants referred to in Section 3(n)(iv) hereof (including without limitation
the expenses of any special audit and "cold comfort" letters required by or
incident to such performance), (vi) Securities Act liability insurance, if the
Company desires such insurance, and (vii) fees and expenses of all other persons
retained by the Company. In addition, the Company shall pay its internal
expenses (including without limitation all salaries and expenses of its officers
and employees performing legal or accounting duties), the expense of any annual
audit, and the fees and expenses incurred in connection with the listing of the
Securities on the New York Stock Exchange. Notwithstanding the foregoing or
anything in this Agreement to the contrary, each holder of the Registrable
Securities being registered shall pay all commissions, placement agent fees and
underwriting discounts and commissions with respect to any Registrable
Securities sold by it and the fees and disbursements of any counsel or other
advisors or experts retained by such holders (severally or jointly), other than
counsel referred to in clause (iv) above.

         (b) In connection with any registration hereunder, the Company shall
reimburse the holders of the Registrable Securities being registered in such
registration for the reasonable fees and disbursements of not more than one
counsel chosen by the holders of a majority of the Registrable Securities for
whose benefit the applicable Shelf Registration Statement is being prepared.

         5. Indemnification and Contribution.

         (a) Indemnification by the Seller and the Company. Upon the
registration of the Registrable Securities pursuant to Section 2 hereof, the
Seller and the Company shall each indemnify and hold harmless each Electing
Holder and each underwriter, selling agent or other securities professional, if
any, which facilitates the disposition of Registrable Securities, and each of
their respective officers and directors and each person who controls such
Electing Holder,

                                      -10-
<PAGE>

underwriter, selling agent or other securities professional within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act (each such
person being sometimes referred to as an "Indemnified Person") against any
losses, claims, damages or liabilities, joint or several, to which such
Indemnified Person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Shelf Registration Statement or
any Prospectus contained therein or furnished by the Company to any Indemnified
Person, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances in which they were made, not misleading, and the Company
hereby agrees to reimburse such Indemnified Person for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such action or claim as such expenses are incurred; provided,
however, that the Company shall not be liable to any such Indemnified Person in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in such Shelf Registration Statement or
Prospectus, or amendment or supplement thereto, in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such Indemnified Person expressly for use therein; provided, further, however,
that the foregoing indemnity agreement with respect to any Prospectus shall not
inure to the benefit of any Indemnified Person who failed to deliver a final
Prospectus or an amendment or supplement thereto (provided by the Company to the
several Indemnified Persons in the requisite quantity and on a timely basis to
permit proper delivery on or prior to the relevant transaction date) to the
person asserting any losses, claims, damages and liabilities and judgments
caused by any untrue statement or alleged untrue statement of a material fact
contained in any Prospectus, or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading, if such material misstatement or omission or alleged
material misstatement or omission was cured in the final Prospectus or an
amendment or supplement thereto.

         (b) Indemnification by the Holders and any Agents and Underwriters.
Each Electing Holder agrees, as a consequence of the inclusion of any of such
holder's Registrable Securities in any Shelf Registration Statement, and each
underwriter, selling agent or other securities professional, if any, which
facilitates the disposition of Registrable Securities shall agree, as a
consequence of facilitating such disposition of Registrable Securities,
severally and not jointly, to (i) indemnify and hold harmless the Company, its
directors, officers who sign such Shelf Registration Statement and each person,
if any, who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, against any losses, claims,
damages or liabilities to which the Company or such other persons may become
subject, under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in such Shelf Registration Statement or Prospectus, or any amendment
or supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or

                                      -11-
<PAGE>

necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such holder, underwriter, selling agent or other securities professional
expressly for use therein and (ii) reimburse the Company and its directors and
officers who sign such Shelf Registration Statement for any legal or other
expenses reasonably incurred by the Company and such directors and officers in
connection with investigating or defending any such action or claim as such
expenses are incurred.

         (c) Notices of Claims, Etc. Promptly after receipt by an indemnified
party under subsection (a) or (b) of this Section 5 of notice of the
commencement of any action, such indemnified party shall, if a claim in respect
thereof is to be made against an indemnifying party under this Section 5, notify
such indemnifying party in writing of the commencement thereof; but the omission
so to notify the indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under this Section 5.
In case any such action shall be brought against any indemnified party and it
shall notify an indemnifying party of the commencement thereof, such
indemnifying party shall be entitled to participate therein and, to the extent
that it shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and, after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, such indemnifying party shall not be liable to such indemnified
party under this Section 5 for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the written consent of the
indemnified party, which consent will not be unreasonably withheld, effect the
settlement or compromise of, or consent to the entry of any judgment with
respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include a statement as to, or an admission of, fault,
culpability or a failure to act, by or on behalf of any indemnified party.

         (d) Contribution. If the indemnification provided for in this Section 5
is unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) of this Section 5 in respect of any losses, claims,
damages or liabilities (or actions in respect thereof) referred to therein, then
each indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and the indemnified party in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative fault of such indemnifying party and
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information about such
indemnifying party or indemnified party supplied

                                      -12-
<PAGE>

by such indemnifying party or by such indemnified party, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The parties hereto agree that it would not
be just and equitable if contribution pursuant to this Section 5(d) were
determined by pro rata allocation (even if the Electing Holders or any
underwriters, selling agents or other securities professionals or all of them
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to in this Section 5(d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above shall be deemed to include any legal or other fees or
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The obligations of the Electing
Holders and any underwriters, selling agents or other securities professionals
in this Section 5(d) to contribute shall be several in proportion to the
percentage of Registrable Securities registered or underwritten, as the case may
be, by them and not joint.

         (e) Notwithstanding any other provision of this Section 5, in no event
will any (i) Electing Holder be required to undertake liability to any person
under this Section 5 for any amounts in excess of the dollar amount of the
proceeds to be received by such holder from the sale of such holder's
Registrable Securities (after deducting any fees, discounts and commissions
applicable thereto) pursuant to any Shelf Registration Statement and (ii)
underwriter, selling agent or other securities professional be required to
undertake liability to any person hereunder for any amounts in excess of the
discount, commission or other compensation payable to such underwriter, selling
agent or other securities professional with respect to the Registrable
Securities underwritten by it and distributed to the public.

         (f) The obligations of the Company and Seller under this Section 5
shall be in addition to any liability that the Company and the Seller may
otherwise have to any Indemnified Person and the obligations of any Indemnified
Person under this Section 5 shall be in addition to any liability that such
Indemnified Person may otherwise have to the Company. The remedies provided in
this Section 5 are not exclusive and shall not limit any rights or remedies that
may otherwise be available to an indemnified party at law or in equity.

         6. Underwritten Offering. Any holder of Registrable Securities who
desires to do so may sell Registrable Securities (in whole or in part) in an
underwritten offering; provided, however, the Company shall not be required to
facilitate an underwritten offering pursuant to the Shelf Registration Statement
by any holders unless the offering relates to at least 25% of the Securities
sold pursuant to the Stock Purchase Agreement. In any such underwritten
offering, the investment banker or investment bankers and manager or managers
that will administer the offering will be selected by, and the underwriting
arrangements with respect thereto (including the size of the offering) will be
approved by, the holders of a majority of the Registrable Securities to be
included in such offering; provided, however, that such investment bankers and
managers and underwriting arrangements must be reasonably satisfactory to the
Company. No holder may participate in any underwritten offering contemplated
hereby unless (a) such holder agrees to sell such holder's Registrable
Securities to be included in the

                                      -13-
<PAGE>

underwritten offering in accordance with any approved underwriting arrangements,
(b) such holder completes and executes all reasonable questionnaires, powers of
attorney, indemnities, underwriting agreements, lock-up letters and other
documents required under the terms of such approved underwriting arrangements
and (c) if such holder is not then an Electing Holder, such holder returns a
completed and signed Notice and Questionnaire to the Company in accordance with
Section 3(a) hereof within a reasonable amount of time before such underwritten
offering. The holders participating in any underwritten offering shall be
responsible for any underwriting discounts and commissions and fees and, subject
to Section 4 hereof, expenses of their own counsel. The Company shall pay all
expenses customarily borne by issuers, including but not limited to filing fees,
the fees and disbursements of its counsel and independent public accountants and
any printing expenses incurred in connection with such underwritten offering.
Notwithstanding the foregoing, upon receipt of a request from the Managing
Underwriter or a representative of holders of a majority of the Registrable
Securities to be included in an underwritten offering to prepare and file an
amendment or supplement to the Shelf Registration Statement and Prospectus in
connection with an underwritten offering, the Company may delay the filing of
any such amendment or supplement for up to 60 days if there occurs or exists any
pending corporate development the disclosure of which would, in the judgment of
the Company, be harmful to the business, operations, prospects, or condition
(financial or otherwise) of the Company and its subsidiaries, taken as a whole..

         7. Rules 144 and 144A.

         The Company agrees, for so long as any Registrable Securities remain
outstanding and during any period in which the Company (a) is not subject to
Section 13 of 15(d) of the Exchange Act, to make available, upon request of any
holder of Registrable Securities, to such holder or beneficial owner of
Registrable Securities in connection with any sale thereof and any prospective
purchaser of such Registrable Securities designated by such holder or beneficial
owner, the information required by Rule 144A(d)(4) under the Securities Act in
order to permit resales of such Registrable Securities pursuant to Rule 144A of
the Securities Act, and (b) is subject to Section 13 of 15 (d) of the Exchange
Act, to make all filings required thereby in a timely manner in order to permit
resales of such Registrable Securities pursuant to Rule 144 of the Securities
Act.

         8. Miscellaneous.

         (a) Remedies. The Company acknowledges and agrees that any failure by
the Company to comply with its obligations under this Agreement may result in
material irreparable injury to the Purchasers or the holders of Registrable
Securities for which there is no adequate remedy at law, that it will not be
possible to measure damages for such injuries precisely and that, in the event
of any such failure, the Purchasers or any holder of Registrable Securities may
obtain such relief as may be required to specifically enforce the Company's
obligations hereunder. The Company further agrees to waive the defense in any
action for specific performance that a remedy at law would be adequate.

         (b) Other Registration Rights. The Company will not, on or after the
date of this Agreement, enter into any agreement with respect to its securities
that is inconsistent with the

                                      -14-
<PAGE>

rights granted to the holders of Registrable Securities in this Agreement or
otherwise conflicts with the provisions hereof. The Company shall not permit any
securities other than the Registrable Securities to be included in any Shelf
Registration Statement hereunder. The rights granted to the holders of
Registrable Securities hereunder do not in any way conflict with and are not
inconsistent with the rights granted to the holders of the Company's securities
under any agreement in effect on the date hereof.

         (c) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures from
the provisions hereof may not be given unless (i) in the case of Section 2
hereof and this Section 8(c)(i), the Company has obtained the written consent of
holders of all outstanding Registrable Securities and (ii) in the case of all
other provisions hereof, the Company has obtained the written consent of holders
of a majority of the Registrable Securities (excluding Registrable Securities
held by the Company or its Affiliates). Notwithstanding the foregoing, a waiver
or consent to departure from the provisions hereof that relates exclusively to
the rights of holders whose Registrable Securities are being sold pursuant to a
Shelf Registration Statement and that does not affect directly or indirectly the
rights of other holders of Registrable Securities may be given by the holders of
a majority of Registrable Securities being sold by such holders pursuant to such
Shelf Registration Statement.

         (d) Notices. All notices and other communications provided for or
permitted hereunder shall be given as provided in the Stock Purchase Agreement.

         (e) Parties in Interest. The parties to this Agreement intend that all
holders of Registrable Securities shall be entitled to receive the benefits of
this Agreement and that any Electing Holder shall be bound by the terms and
provisions of this Agreement by reason of such election with respect to the
Registrable Securities that are included in a Shelf Registration Statement. All
the terms and provisions of this Agreement shall be binding upon, shall inure to
the benefit of and shall be enforceable by the respective successors and assigns
of the parties hereto and any holder from time to time of the Registrable
Securities to the aforesaid extent. In the event that any transferee of any
holder of Registrable Securities shall acquire Registrable Securities, in any
manner, whether by gift, bequest, purchase, operation of law or otherwise, such
transferee shall, without any further writing or action of any kind, be entitled
to receive the benefits of and, if an Electing Holder, be conclusively deemed to
have agreed to be bound by and to perform all of the terms and provisions of
this Agreement to the aforesaid extent.

         (f) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

         (g) Headings. The headings in this agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning, construction
or interpretation hereof.

         (h) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without giving effect to
provisions relating to

                                      -15-
<PAGE>

conflicts of law to the extent the application of the laws of another
jurisdiction would be required thereby.

         (i) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired or affected
thereby, it being intended that all of the rights and privileges of the parties
hereto shall be enforceable to the fullest extent permitted by law.

         (j) Survival. The respective indemnities, agreements, representations,
warranties and other provisions set forth in this Agreement or made pursuant
hereto shall remain in full force and effect, regardless of any investigation
(or any statement as to the results thereof) made by or on behalf of any
Electing Holder, any director, officer or partner of such holder, any agent or
underwriter, any director, officer or partner of such agent or underwriter, or
any controlling person of any of the foregoing, and shall survive the transfer
and registration of the Registrable Securities of such holder.

         (k) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter hereof. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein, with respect to
the registration rights granted with respect to the Registrable Securities. This
Agreement supersedes all prior agreements and understandings between the parties
with respect to such subject matter.

                  Please confirm by signing in the space provided below that the
foregoing correctly sets forth the agreement between the Company and you.

                                                    Very truly yours,

                                                    HYPERCOM CORPORATION

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

                                                         GEORGE WALLNER

                                                         -----------------------
                                                         George Wallner

                                      -16-
<PAGE>

                  REGISTRATION RIGHTS AGREEMENT SIGNATURE PAGE

Accepted and Agreed

--------------------------------------------------
Name (Print)

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

Date:
         ----------------------------------------
Address:
         ----------------------------------------

Telephone:
            -------------------------------------
Facsimile:
            -------------------------------------

                                      -17-Exhibit 4(b)

                          COLLATERAL AGENCY AGREEMENT

     COLLATERAL AGENCY AGREEMENT, dated as of May 15, 2003, among BLOUNT
INTERNATIONAL, INC., a Delaware corporation ("Holdings"), BLOUNT, INC., a
Delaware corporation ("Blount, Inc."), each of the Subsidiaries of Blount, Inc.
signatory hereto (Holdings, Blount, Inc., each such Subsidiary, together with
any other Subsidiary that may become a party hereto as provided herein, the
"Credit Parties"), and GENERAL ELECTRIC CAPITAL CORPORATION, as collateral agent
(in such capacity, the "Collateral Agent") for the holders from time to time of
the Secured Obligations (as defined below).

                             W I T N E S S E T H:

     WHEREAS, Holdings, Blount, Inc. and, as applicable, the other Credit
Parties are parties to (a) the Credit Agreement, dated as of May 15, 2003 (as
amended, restated, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among Holdings, Blount, Inc., the other Credit Parties
thereto, the Canadian Credit Parties, the several banks and other financial
institutions or entities from time to time parties thereto (the "Lenders"),
General Electric Capital Canada Inc., as Canadian Agent, and General Electric
Capital Corporation, as Agent, and (b) the Indenture dated as of June 18, 1998
(as amended, restated, supplemented or otherwise modified from time to time, the
"Existing Senior Notes Indenture") among Blount, Inc., Holdings and Lasalle
National Bank, as Trustee (the "Indenture Trustee");

     WHEREAS, in connection with the Credit Agreement certain of the Credit
Parties have entered into the Shared Collateral Documents (as defined below) in
order to secure, among other things, the Credit Agreement Obligations (as
defined below), and such Credit Parties have pledged collateral to the
Collateral Agent under such Shared Collateral Documents;

     WHEREAS, pursuant to the provisions of the Existing Senior Notes Indenture
as it exists on the date hereof, Blount, Inc. and Holdings may not, and may not
permit any of their respective Subsidiaries to, secure the Credit Agreement
Obligations with a Mortgage on any Principal Property or any shares of Capital
Stock or Debt (as such terms are defined in the Existing Senior Notes Indenture)
of Blount, Inc. or any of its Subsidiaries without equally and ratably securing
the Existing Senior Note Obligations (as defined below); and

     WHEREAS, the Credit Parties are entering into this Agreement, and have
requested the Collateral Agent to act as collateral agent hereunder, to enable
the Credit Parties to comply with the provisions of the Existing Senior Notes
Indenture. The Collateral Agent is willing to act as collateral agent hereunder
on the terms and subject to the conditions set forth in this Agreement.

     NOW, THEREFORE, the Credit Parties and the Collateral Agent hereby agree as
follows:

<PAGE>

SECTION 1.  DEFINED TERMS

     1.1  Incorporation by Reference. Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings given to
them in the Credit Agreement.

     1.2  Certain Definitions. As used in this Agreement, the capitalized terms
defined in the recitals hereto shall have the meanings specified therein, and
the following terms have the meanings specified below:

     "COLLATERAL AGENT'S Fees" means all fees, costs and expenses of the
Collateral Agent of the type described in Sections 5.3, 5.4, 5.5 and 5.6.

     "CREDIT AGREEMENT OBLIGATIONS" shall have the meaning assigned to such term
in the Shared Pledge Agreement.

     "DEBT INSTRUMENTS" means (i) the Credit Agreement and the US Guaranty, and
(ii) the Existing Senior Notes Indenture.

     "DISTRIBUTION DATE" means the date on which any funds are distributed by
the Collateral Agent in accordance with the provisions of Section 4.1.

     "EVENT OF DEFAULT" means any "Event of Default" under the Credit Agreement
or any "Event of Default" under the Existing Senior Notes Indenture (as such
terms are defined in the Credit Agreement and the Existing Senior Notes
Indenture, respectively).

     "EXISTING SENIOR NOTE OBLIGATIONS" means the obligations (without
duplication) of Blount, Inc. and Holdings to pay the principal of, and premium,
if any, and interest on, the Existing Senior Notes; provided that the "EXISTING
SENIOR NOTE OBLIGATIONS" shall not in any event include any obligations in
respect of debt securities issued under the Existing Senior Notes Indenture
after the date hereof.

     "SECURED OBLIGATIONS" means, without duplication, (i) the Credit Agreement
Obligations and (ii) the Existing Senior Note Obligations.

     "SECURED PARTIES" means (i) the Lenders, (ii) the Swing Line Lender, (iii)
the Agent, (iv) the Canadian Agent, (v) the holders of the Existing Senior Notes
and (vi) the Indenture Trustee.

     "SHARED COLLATERAL" means the property and assets from time to time subject
to Liens under the Shared Collateral Documents and the amounts held from time to
time in the Shared Collateral Accounts.

     "SHARED COLLATERAL ACCOUNT" shall have the meaning specified in Section
3.1.

     "SHARED COLLATERAL DOCUMENTS" means the Shared Pledge Agreement, the Shared
Foreign Pledge Agreements and the Shared Mortgages.

                                      S-2

<PAGE>

     "SHARED FOREIGN PLEDGE AGREEMENTS" means, collectively, (i) that certain
Commercial Pledge Agreement over Shares of even date herewith executed by
Blount, Inc. in favor of the Collateral Agent, pledging 65% of the Stock of
Blount Europe, S.A., a company formed under the laws of Belgium, (ii) that
certain Quota Pledge Agreement of even date herewith executed by Blount, Inc. in
favor of the Collateral Agent, pledging 65% of the Stock of Blount Industrial,
Ltd., a company formed under the laws of Brazil, (iii) that certain Share Pledge
Agreement of even date herewith executed by Blount, Inc. in favor of the
Collateral Agent, pledging 65% of the Stock of Svenska Blount Aktiebolag, a
company formed under the laws of Sweden, and Svenska Oregon AB, a company formed
under the laws of Sweden, and (iv) that certain Agreement on the Pledge of
Shares of even date herewith executed by Blount, Inc. in favor of the Collateral
Agent, pledging 65% of the Stock of Blount GmbH, a company formed under the laws
of Germany.

      "SHARED PLEDGE AGREEMENT" means the Shared Pledge Agreement dated as of
the date hereof made by the Credit Parties in favor of the Collateral Agent, for
the benefit of the Secured Parties.

      "SHARED MORTGAGES" means the Mortgages made in favor of the Collateral
Agent covering real property in which the Lien thereunder shall be granted for
the equal and ratable benefit of the Secured Parties.

      "TRIGGERING EVENT" means the occurrence of an Event of Default, the
acceleration of the principal amount of all Secured Obligations (to the extent
capable of being accelerated) under the terms of the Credit Agreement or the
Existing Senior Notes Indenture and receipt by the Collateral Agent of a written
notice to such effect from the Agent under the Credit Agreement or the Indenture
Trustee under the Existing Senior Notes Indenture.

            (a)   The words "hereof", "herein" and "hereunder", and words of
similar import, shall be construed to refer to this Agreement in its entirety
and not to any particular provision hereof. All references herein to Sections
shall, unless otherwise specified, be deemed to refer to Sections of this
Agreement.

SECTION 2.  STATUS OF SHARED COLLATERAL; REMEDIES

      2.1  STATUS OF SHARED COLLATERAL. The Collateral Agent hereby declares,
and each of the Credit Parties agrees, that the Collateral Agent holds the
Shared Collateral as agent under this Agreement for the equal and ratable
benefit of the Secured Parties as provided herein. By acceptance of the
benefits of this Agreement, each Secured Party (whether or not a signatory
hereto) (i) consents to the appointment of the Collateral Agent as agent
hereunder, (ii) confirms that the Collateral Agent shall have the authority to
act as the exclusive agent of such Secured Party for enforcement of any
remedies under or with respect to any Shared Collateral Document and the giving
or withholding of any consent or approval relating to any Shared Collateral or
any Credit Party's obligations with respect thereto and (iii) agrees that,
except as provided in this Agreement, it shall not take any action to enforce
any of such remedies or give any such consents or approvals.

                                      S-3
<PAGE>

     2.2  DETERMINATIONS RELATING TO SHARED COLLATERAL. In the event (i) the
Collateral Agent shall receive any written request from Holdings or any of its
Subsidiaries under any Shared Collateral Document for consent or approval with
respect to any matter or thing relating to any Shared Collateral or any Credit
Party's obligations with respect thereto or (ii) there shall be due to or from
the Collateral Agent under the provisions of any Shared Collateral Document any
material performance or the delivery of any material instrument or (iii) the
Collateral Agent shall become aware of any nonperformance by any Credit Party of
any covenant or any breach of any representation or warranty set forth in any
Shared Collateral Document, then, in each such event, the Collateral Agent shall
advise the Agent of the matter or thing as to which consent has been requested
or the performance or instrument required to be delivered or the nonperformance
or breach of which the Collateral Agent has become aware. The Requisite Lenders
shall have the exclusive authority to direct the Collateral Agent's response to
any of the events or circumstances contemplated in clauses (i), (ii) and (iii)
above.

      2.3 REMEDIES. Upon the occurrence of a Triggering Event, or upon receipt
of any written directions as contemplated by paragraph (b) of this Section 2.3,
the Collateral Agent shall, within 10 Business Days thereafter, notify the
Indenture Trustee and the Agent that a Triggering Event exists or that the
Collateral Agent has received such written directions, as the case may be,
enclosing with such notice a copy of the applicable notice or written
directions, as the case may be. In addition, the Collateral Agent shall notify
Blount, Inc. that a Triggering Event exists.

            (a)  Following the occurrence of a Triggering Event, the Collateral
Agent (in its discretion or at the direction of the Requisite Lenders) shall
have the exclusive right to direct the time, method and place of conducting any
proceeding for the exercise of any right or remedy available to the Collateral
Agent with respect to the Shared Collateral, or of exercising any power
conferred on the Collateral Agent, or for the taking of any other action
authorized by the Shared Collateral Documents. Nothing in this Section 2.3 shall
impair the right of the Collateral Agent in its discretion to take any action
deemed proper by the Collateral Agent and which is not inconsistent with such
direction by the Requisite Lenders.

      2.4  RIGHT TO MAKE ADVANCES.  In the event an advance of funds shall at
any time be required for the preservation or maintenance of any Shared
Collateral, the Collateral Agent, the Agent, the Canadian Agent or, with the
consent of Requisite Lenders, any Lender shall be entitled to make such advance
without notice to any Credit Party or any other Secured Party; provided,
however, that neither Collateral Agent nor Agent shall make advances under
this Section in excess of 10% of the US Borrowing Base unless Requisite Lenders
consent to such advances and Canadian Agent shall not make advances under this
Section in excess of 10% of the Canadian Borrowing Base unless Requisite
Lenders consent to such advance. Each such advance shall be reimbursed, with
interest accrued from the date such advance was made at the rate per annum at
which interest would then be payable on past due US Revolving Credit Advances
that are US Index Rate Loans under the Credit Agreement (the "Default Rate"),
by the US Borrowers upon demand by the Collateral Agent, the Agent, the
Canadian Agent or such Lender, as the case may be, and if the US Borrowers
fail to comply with any such demand, out of the proceeds of any Shared
Collateral distributed pursuant to clause First of Section 4.1. In the event
any Secured Party shall receive any funds which, under this Section 2.4, belong
to the Collateral Agent or any other Secured Party, such Secured Party shall
remit such funds promptly

                                      S-4
<PAGE>

to the Collateral Agent for distribution to the Collateral Agent or such other
Secured Party, as the case may be, and prior to such remittance shall hold such
funds separate from its own property and in trust for the Collateral Agent or
such other Secured Party, as the case may be.

      2.5 NATURE OF SECURED PARTIES' RIGHTS. All of the Secured Parties shall
be bound by any instruction or direction given by the Requisite Lenders
pursuant to this Section 2.

SECTION 3.  SHARED COLLATERAL ACCOUNTS.

      3.1  Shared Collateral Accounts. Following the occurrence of a Triggering
Event, the Collateral Agent shall establish and, at all times thereafter until
all proceeds of Shared Collateral due to the holders of the Existing Senior
Notes and the Indenture Trustee have been paid to such Secured Parties, there
shall be maintained with the Collateral Agent a separate collateral account
(each, a "Shared Collateral Account"; collectively, the "Shared Collateral
Accounts") for each of the Secured Parties in respect of its applicable Debt
Instruments. All funds on deposit in the Shared Collateral Accounts shall be
held, applied and disbursed by the Collateral Agent in accordance with the terms
of this Agreement.

      3.2  Investment of Funds. The Collateral Agent shall invest and reinvest
moneys on deposit in the Shared Collateral Accounts at any time in Cash
Equivalents. Blount, Inc. shall bear the risk of loss on any investment made
hereunder (except for such losses that result from the gross negligence or
willful misconduct of the Collateral Agent in failing to invest moneys on
deposit in the Shared Collateral Accounts in Cash Equivalents) and shall, upon
demand of the Collateral Agent to Blount, Inc., deliver immediately available
funds to the Collateral Agent in an amount equal to such loss or losses.

SECTION 4.  APPLICATION OF CERTAIN AMOUNTS

      4.1  Application of Proceeds. If, following acceleration of the principal
amount of any Debt Instrument and pursuant to the exercise of any remedy set
forth in any Shared Collateral Document, any Shared Collateral is sold or
otherwise realized upon by the Collateral Agent, the proceeds received by the
Collateral Agent in respect of such Shared Collateral shall be applied as soon
as practicable after receipt as follows:

      FIRST: To the Collateral Agent in an amount equal to the Collateral
Agent's Fees which are unpaid as of the applicable Distribution Date and to any
Secured Party which has theretofore advanced or paid any such Collateral Agent's
Fees in an amount equal to the amount thereof so advanced or paid by such
Secured Party and to reimburse to the Collateral Agent, the Agent, the Canadian
Agent and any Lender the amount of any advance made pursuant to Section 2.4
(with interest thereon at the Default Rate) or indemnity payments made under
Section 6.4(d);

      SECOND: Pro rata, (i) to the Agent, for the benefit of itself, the
Canadian Agent and the Lenders, in proportion to the amount of Secured
Obligations then owing to the Agent, the Canadian Agent and the Lenders (after
giving effect to any payments previously made under this Section), and (ii) to
the Indenture Trustee, for the benefit of itself and the holders of the Existing
Senior Note Obligations, in proportion to the amount of Secured Obligations then
owing to itself and the holders of the Existing Senior Note Obligations (after
giving effect to any payments previously made under this Section), until all the
Secured Obligations have been paid in full; and

                                      S-5
<PAGE>

      THIRD: After payment in full of all Secured Obligations, to the Credit
Parties or their successors or assigns, as their interests may appear, or to
whomsoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct.

      4.2  Application of Withheld Amounts. If at any time any proceeds of
Shared Collateral collected or received by the Collateral Agent are
distributable to any Secured Party pursuant to Section 4.1, and if such Secured
Party shall give notice (each, a "Withheld Amount Notice") that all or a
portion of such proceeds (each such amount, a "Withheld Amount") shall be held
by the Collateral Agent pending the application thereof to Secured Obligations
of such Secured Party, then, notwithstanding the provisions of Section 4.1, the
Collateral Agent shall hold such Withheld Amount in the applicable Shared
Collateral Account until such time as the applicable Secured Party shall
request the delivery thereof for application to Secured Obligations pursuant to
the provisions of Section 4.3.

      4.3   Release of Amounts in Shared Collateral Accounts.

            (a)  Amounts on deposit in a Shared Collateral Account with respect
to Secured Obligations shall be paid to the applicable Secured Party upon
receipt by the Collateral Agent of a certificate of such Secured Party setting
forth the name of the Person to whom payment should be made and the amount to be
delivered to such Person and, in the case of amounts on deposit in any Shared
Collateral Account relating to the Existing Senior Notes, stating that such
amount will be applied to the payment of Secured Obligations.

            (b)  If, at any time, funds are on deposit in a Shared Collateral
Account with respect to the Existing Senior Notes and the principal of and
accrued interest on and all other amounts due in respect of the Existing Senior
Notes have been paid in full, such funds shall be distributed and applied in
accordance with the provisions of Section 4.1 hereof.

      4.4  Payment Provisions. For the purposes of applying the provisions of
Section 4.1, all interest, fees and expenses to be paid on any of the Secured
Obligations pursuant to the terms of any Debt Instrument shall, as among the
Secured Parties and irrespective of whether such interest, fees and expenses are
or would be recognized or allowed in any bankruptcy or similar proceeding, be
treated as due and owing on the Secured Obligations.

SECTION 5.  AGREEMENTS WITH COLLATERAL AGENT

      5.1   Delivery of Debt Instruments.  On the date hereof, Blount, Inc.
shall deliver to the Collateral Agent a true and complete copy of each of the
Debt Instruments as in effect on the date hereof.  Promptly upon the execution
thereof, Blount, Inc. shall deliver to the Collateral Agent a true and complete
copy of any and all amendments, modifications or supplements to any Debt
Instrument.

      5.2  Information as to Holders. Blount, Inc. shall deliver to the
Collateral Agent from time to time upon request of the Collateral Agent a list
setting forth, by each Debt Instrument, (i) the aggregate principal amount
outstanding thereunder, (ii) the interest rate or rates then in effect
thereunder, and (iii) the names of the holders thereof and the unpaid principal
amount thereof owing to each such holder. Blount, Inc. shall furnish to the
Collateral Agent within 30 days of a request therefor a list setting forth the
name and address of each party to whom notices must be

                                      S-6
<PAGE>

sent under the Debt Instruments, and Blount, Inc. agrees to furnish promptly to
the Collateral Agent any changes or additions to such list.

      5.3  Compensation and Expenses. Each US Borrower, jointly and severally,
agrees to pay to the Collateral Agent, from time to time upon demand, (i)
compensation (which shall not be limited by any provision of law) for its
services hereunder, as heretofore agreed between the Collateral Agent and the US
Borrowers, and (ii) all of the reasonable fees, costs and expenses of the
Collateral Agent (including, without limitation, the reasonable fees and
disbursements of its counsel and such special counsel as the Collateral Agent
elects to retain) (a) arising in connection with the preparation, execution,
delivery, modification and termination of this Agreement, or the enforcement of
any provisions hereof, or (b) incurred or required to be advanced in connection
with the administration of this Agreement or any of the Shared Collateral
Documents or the preservation, protection or defense of the Collateral Agent's
rights under this Agreement and the Shared Collateral Documents and in and to
the Shared Collateral. The obligations of the US Borrowers under this Section
5.3 shall survive the termination of this Agreement.

      5.4  Stamp and Other Similar Taxes. Each US Borrower, jointly and
severally, agrees to indemnify and hold harmless the Collateral Agent and each
Secured Party from any present or future claim or liability for any mortgage,
stamp or other similar tax and any penalties or interest with respect thereto,
which may be assessed, levied or collected by any jurisdiction in connection
with this Agreement and the Shared Collateral Documents. The obligations of each
US Borrower under this Section 5.4 shall survive the termination of this
Agreement.

      5.5  Filing Fees, Excise Taxes, etc. Each US Borrower, jointly and
severally, agrees to pay or to reimburse the Collateral Agent for any and all
amounts in respect of all search, filing, recording and registration fees,
taxes, excise taxes and other similar imposts which may be payable or determined
to be payable in respect of the execution, delivery, performance and enforcement
of this Agreement to the extent the same may be paid or reimbursed by the US
Borrowers without subjecting the Collateral Agent, the Indenture Trustee, the
Agent, the Canadian Agent or any Lender to any civil or criminal liability. The
obligations of the US Borrowers under this Section 5.5 shall survive the
termination of this Agreement.

      5.6  Indemnification. (a) Each of the Credit Parties, jointly and
severally, agrees to pay, indemnify, and hold the Collateral Agent harmless from
and against 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 and the Shared Collateral
Documents; provided, however, that the Collateral Agent shall not be indemnified
under this paragraph to the extent such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
are found by final judgment of a court of competent jurisdiction to have
resulted from the gross negligence or willful misconduct of the Collateral
Agent.

      (b) In any suit, proceeding or action brought by the Collateral Agent with
respect to the Shared Collateral or for any sum owing in respect of Secured
Obligations, or to enforce the provisions of any Shared Collateral Document,
each of the Credit Parties, jointly and severally,

                                      S-7
<PAGE>

shall save, indemnify and keep the Collateral Agent and each of the Secured
Parties harmless from and against all expense, loss or damage suffered by reason
of any defense, setoff, counterclaim, recoupment or reduction of liability
whatsoever incurred or suffered by the Collateral Agent or such Secured Party,
as the case may be, arising out of a breach by any Credit Party of any
obligation set forth in this Agreement, or any other Shared Collateral Document
and all such obligations of each Credit Party shall be and remain enforceable
against and only against such Credit Party and shall not be enforceable against
the Collateral Agent or any Secured Party. The provisions of this Section 5.6
shall survive the termination of this Agreement.

      5.7  Further Assurances. At any time and from time to time, upon the
written request of the Collateral Agent, and at the expense of the Credit
Parties, each Credit Party shall promptly execute and deliver any and all such
further instruments and documents and take such further action as Collateral
Agent reasonably deems necessary or desirable in obtaining the full benefits of
this Agreement.

SECTION 6.  THE COLLATERAL AGENT

      6.1  Certain Duties. The Collateral Agent's duties in respect of the
Shared Collateral and the Shared Collateral Documents shall include, without
limitation, the review of applications of the Credit Parties or others for
consents, waivers, releases or other matters relating to the Shared Collateral
and the Shared Collateral Documents and the prosecution following any Event of
Default of any action or proceeding or the taking of any nonjudicial remedial
action as shall be determined to be required pursuant to the provisions of
Sections 2.2 and 2.3. The Collateral Agent's sole duty with respect to the
custody, safekeeping and physical preservation of the Shared Collateral in its
possession, under Section 9-207 of the New York UCC or otherwise, shall be to
deal with such Shared Collateral in the same manner as it customarily deals with
similar collateral of other parties held by it. The duties of the Collateral
Agent shall be mechanical and administrative in nature and the Collateral Agent
shall not have, or be deemed to have, by reason of this Agreement, any Shared
Collateral Document or otherwise a fiduciary relationship in respect of any
Secured Party.

      6.2  Exculpatory Provisions. (a) The Collateral Agent shall not be
responsible in any manner whatsoever for the correctness of any recitals,
statements, representations or warranties herein contained, all of which are
made solely by the Credit Parties. The Collateral Agent makes no
representations as to the value or condition of the Shared Collateral or any
part thereof, or as to the title of the Credit Parties thereto or as to the
security afforded by the Shared Collateral Documents or this Agreement or as
to the validity, execution (except its own execution thereof), enforceability,
perfection, legality or sufficiency of the Shared Collateral Documents or this
Agreement or of the Secured Obligations, and the Collateral Agent shall incur
no liability or responsibility with respect to any such matters. The
Collateral Agent shall not be responsible for insuring the Shared Collateral
or for the payment of taxes, charges, assessments or Liens upon the Shared
Collateral or otherwise as to the maintenance of the Shared Collateral.

            (b)  The Collateral Agent shall not be required to ascertain or
inquire as to the performance by Holdings, Blount, Inc., the other Credit
Parties or any other person of any of the covenants or agreements contained
herein, in any Shared Collateral Document or in any Debt Instrument. Whenever it
is necessary, or in the opinion of the Collateral Agent advisable, for the

                                      S-8
<PAGE>

Collateral Agent to ascertain the amount of Secured Obligations then held by a
Secured Party, the Collateral Agent may rely on a certificate of such Secured
Party (or, in the case of the Credit Agreement Obligations, the Agent, or, in
the case of the Existing Senior Notes Obligations, the Indenture Trustee) as to
such amount, and if any Secured Party (or, in the case of the Credit Agreement
Obligations, the Agent, and, in the case of the Existing Senior Notes
Obligations, the Indenture Trustee) shall not provide such information to the
Collateral Agent, such Secured Party shall not be entitled to receive payments
hereunder (in which case the amounts otherwise payable to such Secured Party
shall be held for such Secured Party in the applicable Shared Collateral
Account) until such Secured Party (or other Person, as specified above) has
provided such information to the Collateral Agent.

            (c)  The Collateral Agent shall not be personally liable for any
action taken or omitted to be taken by it in accordance with this Agreement or
any Shared Collateral Document or any Debt Instrument, except for such actions
or omissions that constitute gross negligence or willful misconduct by the
Collateral Agent. The Collateral Agent and its affiliates may make loans to,
accept deposits from and generally engage in any kind of business with Holdings
and its Subsidiaries as though the Collateral Agent were not the Collateral
Agent hereunder. With respect to the Loans made by it and all Secured
Obligations owing to it, the Collateral Agent shall have the same rights and
powers under this Agreement as any Lender and may exercise the same as though it
were not the Collateral Agent hereunder, and the terms "Lender" and "Lenders"
shall include the Collateral Agent in its individual capacity.

      6.3  Delegation of Duties. The Collateral Agent may execute any of the
powers hereof and perform any duty hereunder either directly or by or through
agents or attorneys-in-fact which it shall select with due care. The Collateral
Agent shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it.

      6.4  Reliance by Collateral Agent. (a) Whenever in the administration of
this Agreement or any of the Shared Collateral Documents the Collateral Agent
shall deem it necessary or advisable that a matter be proved or established in
connection with the taking of any action hereunder by the Collateral Agent, such
matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively provided or established by a
certificate of an officer of Blount, Inc. delivered to the Collateral Agent, and
such officers' certificate shall be full warranty to the Collateral Agent for
any action taken, suffered or omitted in reliance thereon.

            (b) The Collateral Agent may consult with counsel, and any opinion
of such counsel (which may be in-house counsel for the Collateral Agent) shall
be full and complete authorization and protection in respect of any action taken
or suffered by it hereunder in accordance therewith. The Collateral Agent shall
have the right at any time to seek instructions concerning the administration of
this Agreement or any of the Shared Collateral Documents from any court of
competent jurisdiction.

            (c) The Collateral Agent may rely, and shall be fully protected in
acting, upon any resolution, statement, certificate, instrument, opinion,
report, notice, request, consent, order, bond or other paper or document which
it has no reason to believe to be other than genuine and to have been signed or
presented by the proper party or parties or, in the case of telecopies and

                                      S-9
<PAGE>

telexes, to have been sent by the proper party or parties. The Collateral Agent
may conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or opinions furnished to
the Collateral Agent and conforming to the requirements of this Agreement or any
Shared Collateral Document.

            (d) The Collateral Agent shall not be under any obligation to
exercise any of the rights or powers vested in the Collateral Agent by this
Agreement unless the Collateral Agent shall have been provided adequate security
and indemnity against the costs, expenses and liabilities which may be incurred
by it in compliance with such request or direction, including, without
limitation, such reasonable advances as may be requested by the Collateral
Agent.

      6.5  Limitations on Duties of Collateral Agent. The Collateral Agent shall
not be liable with respect to any action taken or omitted to be taken by it in
accordance with the direction of the Requisite Lenders pursuant to Section 2.
Except as herein otherwise expressly provided, the Collateral Agent shall not be
under any obligation to take any action which is discretionary with the
Collateral Agent under the provisions hereof except upon the written request of
the Requisite Lenders pursuant to Section 2. The Collateral Agent shall make
available for inspection and copying by any Secured Party each certificate or
other paper furnished to the Collateral Agent by any Credit Party under or in
respect of this Agreement or any Shared Collateral Document.

      6.6  Moneys Held by the Collateral Agent. All moneys received by the
Collateral Agent under or pursuant to any provision of this Agreement shall be
held for the purposes for which they were paid or are held.

      6.7  Resignation or Removal of the Collateral Agent. (a) The Collateral
Agent may at any time, by giving 30 days' prior written notice to Blount, Inc.,
Lenders and the Indenture Trustee, resign and be discharged of the
responsibilities hereby created, such resignation to become effective upon the
earlier of (i) 30 days from the date of such notice and (ii) the appointment of
a successor Collateral Agent or Collateral Agents by the Requisite Lenders. At
any time that GE Capital is no longer a holder of any Commitments or Loans,
Requisite Lenders may remove Collateral Agent at any time, by giving 30 days'
prior written notice to Blount, Inc., Lenders and the Indenture Trustee,
whereupon GE Capital shall be discharged of the responsibilities hereby created,
such removal to become effective upon the earlier of (i) 30 days from the date
of such notice and (ii) the appointment of a successor Collateral Agent or
Collateral Agents by the Requisite Lenders. If no successor Collateral Agent or
Collateral Agents shall be appointed and approved within 30 days from the date
of the giving of the aforesaid notice of resignation or removal, the Collateral
Agent (notwithstanding the termination of all of its other duties and
obligations hereunder by reason of such resignation or removal) shall, or any
Secured Party or Blount, Inc. may, apply to any court of competent jurisdiction
to appoint a successor Collateral Agent or Collateral Agents (which may be an
individual or individuals) to act until such time, if any, as a successor
Collateral Agent or Collateral Agents shall have been appointed as above
provided. Any successor Collateral Agent or Collateral Agents so appointed by
such court shall immediately and without further act be superseded by any
successor Collateral Agent or Collateral Agents approved by the Requisite
Lenders as above provided.

                                      S-10
<PAGE>

            (b) If at any time the Collateral Agent shall resign, be removed
pursuant to Section 6.7(a), or otherwise become incapable of acting, or if at
any time a vacancy shall occur in the office of Collateral Agent for any other
cause, a successor Collateral Agent or Collateral Agents may be appointed by the
Requisite Lenders, and the powers, duties, authority and title of the
predecessor Collateral Agent or Collateral Agents terminated and canceled
without procuring the resignation of such predecessor Collateral Agent or
Collateral Agents, and without any other formality (except as may be required by
applicable law) other than appointment and designation of a successor Collateral
Agent or Collateral Agents in writing, duly acknowledged, delivered to the
predecessor Collateral Agent or Collateral Agents, and filed for record in each
public office, if any, in which this Agreement is required to be filed.

            (c) The appointment and designation referred to in Section 6.7(b)
shall, after any required filing, be full evidence of the right and authority to
make the same and of all the facts therein recited, and this Agreement shall
vest in such successor Collateral Agent or Collateral Agents, without any
further act, deed or conveyance, all of the estate and title of its predecessor
or their predecessors, and upon such filing for record the successor Collateral
Agent or Collateral Agents shall become fully vested with all the estates,
properties, rights, powers, duties, authority and title of its predecessor or
their predecessors; but such predecessor or predecessors shall, nevertheless, on
the written request of the Requisite Lenders or their successor Collateral Agent
or Collateral Agents, execute and deliver an instrument transferring to such
successor or successors all the estates, properties, rights, powers, duties,
authority and title of such predecessor or predecessors hereunder and shall
deliver all securities and moneys held by it or them to such successor
Collateral Agent or Collateral Agents.

            (d) Any required filing for record of the instrument appointing a
successor Collateral Agent or successor Collateral Agents as hereinabove
provided shall be at the expense of the US Borrowers.

            (e) The indemnification provisions herein shall continue to inure to
the benefit of GE Capital or any successor Collateral Agent as to any actions
taken or omitted to be taken by it while it was acting as Collateral Agent under
this Agreement.

      6.8  Status of Successors to Collateral Agent. Except as permitted by
Section 6.7, every successor to the Collateral Agent appointed pursuant to
Section 6.7 shall be a US Lender, if a US Lender is willing to accept such
appointment, or otherwise shall be a commercial bank or financial institution or
a subsidiary of a commercial bank or financial institution if such commercial
bank or financial institution is organized under the laws of the United States
or any state thereof and has combined capital and surplus of at least
$300,000,000.

      6.9 Merger of Collateral Agent. Any Person into which the Collateral
Agent may be merged, or with which it may be consolidated, or any Person
resulting from any merger or consolidation to which Collateral Agent shall be
a party, shall be Collateral Agent under this Agreement without the execution
or filing of any paper or any further act on the part of the parties hereto.

      6.10  Appointment of Additional and Separate Collateral Agent. Whenever
(i) the Collateral Agent shall deem it necessary or prudent in order to
conform to any law of any

                                      S-11
<PAGE>

jurisdiction in which all or any part of the Shared Collateral shall be
situated or to make any claim or bring any suit with respect to or in
connection with the Shared Collateral, or (ii) the Collateral Agent shall be
advised by counsel satisfactory to it that it is so necessary or prudent in the
interest of the Secured Parties, then in any such case, the Collateral Agent
shall execute and deliver from time to time all instruments and agreements
necessary or proper to constitute another bank or financial institution or one
or more persons approved by the Collateral Agent either to act as additional
agent or agents with respect to all or any part of the Shared Collateral,
jointly with the Collateral Agent, or to act as separate agent or agents of all
or any part of the Shared Collateral, in any such case with such powers as may
be provided in such instruments or agreements, and to vest in such bank,
financial institution or person as such additional agent or separate agent, as
the case may be, any property, title, right or power of the Collateral Agent
deemed necessary or advisable by the Collateral Agent. Each of the Credit
Parties hereby consents to all actions taken by the Collateral Agent under the
foregoing provisions of this Section 6.10.

SECTION 7.  RELEASE OF SHARED COLLATERAL AND SHARED COLLATERAL DOCUMENTS;
EXPIRATION OF CERTAIN RIGHTS

      7.1  Release of Shared Collateral and Shared Collateral Documents;
Expiration of Rights of Certain Secured Parties. Notwithstanding any contrary
provision herein, the Shared Collateral and the Shared Collateral Documents
shall be assigned to (i) the Agent for the benefit of itself, the Canadian
Agent, the Lenders and the other holders of Credit Agreement Obligations (and
such assignment confirmed in a written instrument in form satisfactory to the
Requisite Lenders) on the earlier of the date (a) on which all the Existing
Senior Note Obligations shall have been paid to the holders thereof or (b) that
is 10 days after the provisions of the Existing Senior Note Indenture that
require equal and ratable security shall be held by a court of competent
jurisdiction to be invalid, void or unenforceable, or (ii) the Credit Parties on
the date on which all the Credit Agreement Obligations have been paid in full,
the Commitments have been terminated and no Letters of Credit are outstanding,
the Agent has given written notice thereof to the Collateral Agent and all the
Collateral Agent's Fees have been paid in full.

      7.2  Releases of Shared Collateral. At any time, the Lien of any Shared
Collateral Document may be released in whole or in part by the Collateral Agent
pursuant to written directions signed by the applicable Lenders required under
the Credit Agreement or by the Agent. No such release shall require any consent
or approval by any other Secured Party.

      7.3  Amendment of Shared Collateral Documents. At any time, the Requisite
Lenders under the Credit Agreement shall have the exclusive authority to direct
the Collateral Agent to amend any provision of any Shared Collateral Document,
without any consent or approval of, or prior notice to, any other Secured Party;
provided, however, that, after the occurrence and during the continuance of a
Triggering Event, no such amendment, supplement or waiver shall without the
written consent of the Indenture Trustee adversely affect the rights of the
holders of the Existing Senior Notes to equal and ratable security to the extent
and for the periods contemplated by this Agreement.

SECTION 8.  MISCELLANEOUS

                                      S-12
<PAGE>

      8.1  Equal and Ratable Security. This Agreement is intended solely to
comply with the provisions of the Existing Senior Notes Indenture to secure the
unpaid principal of, premium, if any, and accrued interest on the Existing
Senior Notes, equally and ratably with the Credit Agreement Obligations in
respect of each Mortgage on Principal Property and any shares of Capital Stock
or Debt (as such terms are defined in the Existing Senior Notes Indenture) of
Blount, Inc. and its Subsidiaries. To the extent that the rights and benefits
herein or in any of the Shared Collateral Documents conferred on the holders of
the Existing Senior Notes or the Indenture Trustee shall be held to exceed the
rights and benefits required so to be conferred by such provisions, such rights
and benefits shall be limited so as to provide to such holders and the Indenture
Trustee only those rights and benefits that are required by such provisions. Any
and all rights not herein expressly given to the Indenture Trustee are expressly
reserved to the Agent, the Canadian Agent and the Lenders, it being understood
that in the absence of a requirement to provide equal and ratable security set
forth in the Existing Senior Notes Indenture, this Agreement would not have been
accepted by the Agent, the Canadian Agent or the Lenders.

      8.2  Amendments, Supplements and Waivers. With the written consent of the
Requisite Lenders or all Lenders, as required under the Credit Agreement, the
Collateral Agent and the Credit Parties may from time to time amend, supplement
or waive any provision hereof; provided, however, that, after the occurrence and
during the continuance of a Triggering Event, no such amendment, supplement or
waiver shall without the written consent of the Indenture Trustee adversely
affect the rights of the holders of the Existing Senior Notes to equal and
ratable security to the extent and for the periods contemplated by this
Agreement. Any such amendment, supplement or waiver shall be binding upon the
Secured Parties and their respective successors and assigns.

      8.3  Notices. All notices, requests, demands and other communications
provided for or permitted hereunder shall be in writing (including telecopy
communications) and shall be sent by mail, telecopier, overnight courier or hand
delivery:

                   (i)  If to any Credit Party, to Blount, Inc. at its address
at: 4409 S.E. International Way, Portland, Oregon 97222 Attention: General
Counsel and Chief Financial Officer, or at such other address as shall be
designated by it in a written notice to the Collateral Agent.

                   (ii)  If to the Collateral Agent, to it at its address at:
1100 Abernathy Road, Suite 900, Atlanta, Georgia 30328, Attention: Blount, Inc.
Account Manager, with a copy to General Electric Capital Corporation, 201 High
Ridge Road, Stamford, Connecticut 06927, Attention: Corporate Counsel -
Commercial Finance, with a copy to Paul, Hastings, Janofsky & Walker LLP, 600
Peachtree Street, N.E., Suite 2400, Atlanta, GA 30308-2222, Attention: Jesse H.
Austin III, Esq., or at such other address as shall be designated by it in a
written notice to Blount, Inc. and the Secured Parties.

                   (iii)  If to the Indenture Trustee, to it at its address at:
135 South LaSalle Street, Chicago, Illinois 60603, Attention: Corporate Trust
Services Division, or at such other address as shall be designated by it in a
written notice to Blount, Inc. and the Collateral Agent.

                                      S-13
<PAGE>

                   (iv)  If to the Agent, to it at its address at: 1100
Abernathy Road, Suite 900, Atlanta, Georgia 30328, Attention: Blount, Inc.
Account Manager, with a copy to General Electric Capital Corporation, 201 High
Ridge Road, Stamford, Connecticut 06927, Attention: Corporate Counsel -
Commercial Finance, with a copy to Paul, Hastings, Janofsky & Walker LLP, 600
Peachtree Street, N.E., Suite 2400, Atlanta, GA 30308-2222, Attention: Jesse H.
Austin III, Esq., or at such other address as shall be designated by it in a
written notice to Blount, Inc. and the Collateral Agent.

      All such notices, requests, demands and communications shall be deemed to
have been duly given or made, when delivered by hand, 3 Business Days after
being deposited in the mail, postage prepaid, 1 Business Day after deposit with
a reputable overnight courier with all charges prepaid and when telecopied;
provided, however, that any notice, request, demand or other communication to
the Collateral Agent shall not be effective until received.

      8.4 Headings. Headings used in this Agreement are for convenience only and
shall not affect the construction of this Agreement.

      8.5 Severability. In the event any one or more of the provisions contained
in this Agreement should be held invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby (it being
understood that the invalidity of a particular provision in a particular
jurisdiction shall not in and of itself affect the validity of such provision in
any other jurisdiction). The parties shall endeavor in good-faith negotiations
to replace the invalid, illegal or unenforceable provisions with valid
provisions the economic effect of which comes as close as possible to that of
the invalid, illegal or unenforceable provisions.

      8.6  Dealings with the Credit Parties. Upon any application or demand by
any Credit Party to the Collateral Agent to take or permit any action under any
of the provisions of this Agreement or under any Shared Collateral Document or
such Credit Party, as appropriate, shall furnish to the Collateral Agent a
certificate of an appropriate officer stating that all conditions precedent, if
any, provided for in this Agreement or such Shared Collateral Document, as the
case may be, relating to the proposed action have been complied with, except
that in the case of any such application or demand as to which the furnishing of
such documents is specifically required by any provision of this Agreement or
any Shared Collateral Document relating to such particular application or
demand, no additional certificate or opinion need be furnished.

      8.7  Binding Effect. This Agreement shall be binding upon and inure to the
benefit of each of the parties hereto and shall inure to the benefit of the
Secured Parties and their respective successors and assigns, and nothing herein
or in any Shared Collateral Document is intended or shall be construed to give
any other person any right, remedy or claim under, to or in respect of this
Agreement, the Shared Collateral or the Shared Collateral Documents.

      8.8  Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICTS OF LAWS, EXCEPT AS REQUIRED BY MANDATORY
PROVISIONS OF LAW.

                                      S-14
<PAGE>

      8.9 Counterparts. This Agreement may be executed in separate counterparts,
each of which shall be an original and all of which taken together shall
constitute one and the same instrument.

      8.10  Consent to Jurisdiction and Service of Process. Each Credit Party
hereby irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of any New York State court or Federal court of
the United States of America sitting in New York City, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement or any Shared Collateral Document, or for recognition or enforcement
of any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that, to the extent permitted by applicable law, all
claims in respect of any such action or proceeding may be heard and determined
in such New York State or, to the extent permitted by law, in such Federal
court. Each of the parties hereto agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that the Collateral Agent or
any other Secured Party may otherwise have to bring any action or proceeding
relating to this Agreement or the other Shared Collateral Documents or Loan
Documents against any Credit Party or its properties in the courts of any
jurisdiction.

            (a)  Each Credit Party hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any
suit, action or proceeding arising out of or relating to this Agreement in any
New York State or Federal court. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.

            (b)  Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 8.3. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.

      8.11  Waiver Of Jury Trial. THE PARTIES HERETO KNOWINGLY WAIVE ALL RIGHT
TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY
DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, BETWEEN THE PARTIES
ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED BETWEEN THEM IN CONNECTION WITH, THIS AGREEMENT OR THE TRANSACTIONS
RELATED THERETO.

      8.12  Additional Credit Parties. Each new Subsidiary of any Borrower that
is required to become a party to this Agreement pursuant to Section 5.13 of the
Credit Agreement shall become a Credit Party for all purposes of this Agreement
upon execution and delivery by the Collateral Agent and such Subsidiary of an
instrument in the form of Annex I. The execution and delivery of such instrument
shall not require the consent of any other party hereunder. The rights and
obligations of each Credit Party hereunder shall remain in full force and effect
notwithstanding the addition of any new Subsidiary as a party to this Agreement.

                                      S-15
<PAGE>

                  [remainder of page intentionally left blank]

                                      S-16
<PAGE>

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

CREDIT PARTIES:                            BLOUNT, INC., a Delaware corporation

                                           By: _________________________________
                                           Name: _______________________________
                                           Title: ______________________________

                                           BLOUNT INTERNATIONAL, INC., a
                                           Delaware corporation

                                           By: _________________________________
                                           Name: _______________________________
                                           Title: ______________________________

                                           FABTEK CORPORATION, a Michigan
                                           corporation

                                           By: _________________________________
                                           Name: _______________________________
                                           Title: ______________________________

                                           GEAR PRODUCTS, INC., an Oklahoma
                                           corporation

                                           By: _________________________________
                                           Name: _______________________________
                                           Title: ______________________________

                                           DIXON INDUSTRIES, INC., a Kansas
                                           corporation

                                           By: _________________________________
                                           Name: _______________________________
                                           Title: ______________________________

<PAGE>

                                           FREDERICK MANUFACTURING CORPORATION,
                                           a Delaware corporation

                                           By: _________________________________
                                           Name: _______________________________
                                           Title: ______________________________

                                           OMARK PROPERTIES, INC., an Oregon
                                           corporation

                                           By: _________________________________
                                           Name: _______________________________
                                           Title: ______________________________

                                           WINDSOR FORESTRY TOOLS LLC, By:
                                           Blount, Inc., its sole member

                                           By: _________________________________
                                           Name: _______________________________
                                           Title: ______________________________

                                           4520 CORP., INC., a Delaware
                                           corporation

                                           By: _________________________________
                                           Name: _______________________________
                                           Title: ______________________________

                                           BI, L.L.C.,
                                           By:  Blount, Inc., its managing
                                           member

                                           By: _________________________________
                                           Name: _______________________________
                                           Title: ______________________________

<PAGE>

      COLLATERAL AGENT:                    GENERAL ELECTRIC CAPITAL
                                           CORPORATION, as Collateral Agent

                                           By: __________________________
                                           Name:
                                           Title:

<PAGE>

                                 Annex 1 to the
                           COLLATERAL AGENCY AGREEMENT

      SUPPLEMENT NO.    ____dated as of___________, to the COLLATERAL AGENCY
AGREEMENT dated as of May 15, 2003 (the "Collateral Agency Agreement"), among
Blount International, Inc., a Delaware corporation ("Holdings"), Blount, Inc.,
a Delaware corporation ("Blount, Inc."), each of the Subsidiaries of the
Blount, Inc. party thereto (Holdings, Blount, Inc., each such Subsidiary,
together with any other Subsidiary that may become a party hereto as provided
herein, the "Credit Parties"), and General Electric Capital Corporation, as
collateral agent (in such capacity, the "Collateral Agent") for the holders
from time to time of the Secured Obligations (as defined in the Collateral
Agency Agreement).

      Reference is made to the Credit Agreement, dated as of May 15, 2003 (as
amended, restated, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among Holdings, Blount, Inc., the other Credit Parties
thereto, the Canadian Credit Parties, the several banks and other financial
institutions or entities from time to time parties thereto (the "Lenders"),
General Electric Capital Canada Inc., as Canadian Agent, and General Electric
Capital Corporation, as Agent (in such capacity, the "Agent").

      Capitalized terms used herein and not otherwise defined herein shall have
the meanings assigned to such terms in the Collateral Agency Agreement or, if
not defined in the Collateral Agency Agreement, in the Credit Agreement.

      The Credit Parties have entered into the Collateral Agency Agreement in
order to induce the Lenders to make extensions of credit under the Credit
Agreement. Each new Subsidiary of Blount, Inc. that is required to become a
party to the Shared Pledge Agreement pursuant to Section 5.13 of the Credit
Agreement is required to enter into the Collateral Agency Agreement. Section
8.12 of the Collateral Agency Agreement provides that such Subsidiaries may
become party to the Collateral Agency Agreement by execution and delivery of an
instrument in the form of this Supplement. The undersigned Subsidiary (the "New
Credit Party") is executing this Supplement in accordance with the requirements
of the Credit Agreement in order to induce the Lenders to make additional
extensions of credit thereunder and as consideration for extensions of credit
previously made.

      Accordingly, the Collateral Agent and the New Credit Party agree as
follows:

      Section 1.  Collateral Agency Agreement. In accordance with Section 8.12
of the Collateral Agency Agreement, the New Credit Party by its signature below
becomes a Credit Party under the Collateral Agency Agreement with the same force
and effect as if originally named therein as an Credit Party and the New Credit
Party hereby agrees to all the terms and provisions of the Collateral Agency
Agreement applicable to it as an Credit Party thereunder. Each reference to a
"Credit Party" in the Collateral Agency Agreement shall be deemed to include the
New Credit Party. The Collateral Agency Agreement is hereby incorporated herein
by reference.

      Section 2.  Representations and Warranties. The New Credit Party
represents and warrants to the Collateral Agent and the other Secured Parties
that this Supplement has been duly

<PAGE>

authorized, executed and delivered by it and constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms.

      Section 3.  Counterparts; Effectiveness. This Supplement may be executed
in counterparts, each of which shall constitute an original, but all of which
when taken together shall constitute a single contract. This Supplement shall
become effective when the Collateral Agent shall have received counterparts of
this Supplement that, when taken together, bear the signatures of the New Credit
Party and the Collateral Agent. Delivery of an executed signature page to this
Supplement by facsimile transmission shall be as effective as delivery of a
manually signed counterpart of this Supplement.

      Section 4.  Full Force and Effect. Except as expressly supplemented
hereby, the Collateral Agency Agreement shall remain in full force and effect.

      SECTION 5.  GOVERNING LAW. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS, EXCEPT AS REQUIRED BY
MANDATORY PROVISIONS OF LAW.

      Section 6.  Expenses of Collateral Agent. The New Credit Party agrees to
reimburse the Collateral Agent for its reasonable out-of-pocket expenses in
connection with this Supplement, including the reasonable fees, other charges
and disbursements of counsel for the Collateral Agent.

      IN WITNESS WHEREOF, the New Credit Party and the Collateral Agent have
duly executed this Supplement to the Collateral Agency Agreement as of the day
and year first above written.

                                                 NEW CREDIT PARTY
                                                 ----------------------------
                                                 [NAME OF SUBSIDIARY THAT
                                                 IS THE NEW CREDIT PARTY]

                                                 By: ___________________________
                                                 Name:
                                                 Title:

                                                 COLLATERAL AGENT
                                                 ------------------------------
                                                 GENERAL ELECTRIC CAPITAL
                                                 CORPORATION, as Collateral
                                                 Agent

                                                 By: ___________________________
                                                 Name:
                                                 Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00055-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00055-of-00352.parquet"}]]