Document:

Exhibit 4.7

 

CONFORMED COPY

 

 

PLEDGE AGREEMENT

 

 

Dated July 18,
2005

 

 

between

 

Concordia
Bus Nordic Holding AB

 

as
Pledgor

 

and

 

Citicorp
Trustee Company Limited

 

as
Security Agent

 

 

FIRST RANKING PLEDGE OF SUBORDINATED
SHAREHOLDER LOAN

 

 

THIS FIRST RANKING PLEDGE
AGREEMENT is dated July 18, 2005 and made between:

 

(1)           CONCORDIA BUS NORDIC
HOLDING AB (a
company incorporated under the laws of Sweden) of c/o Swebus AB, Solna
Strandväg 78, 171 54 Solna, Sweden (corporate identity no 556028-1122),
(the “Pledgor”); and

 

(2)           Citicorp Trustee Company
Limited, on its
own behalf and as duly authorized representative of each of the Secured Parties
(the “Security Agent”)

 

WHEREAS:

 

a)     by a mezzanine facility agreement (the “Mezzanine Agreement”) date on or about the date hereof and
made between the Pledgor and Concordia Bus AB
(publ) (“Concordia”) as borrowers, Deutsche
Bank Luxembourg S.A. as facility agent, the financial institutions defined as
Tranche C Facility Lenders in the Mezzanine Agreement and the Security Agent,
the Tranche C Facility Lenders have agreed to make available a Tranche C
Facility (as defined in the Mezzanine Agreement) on the terms and conditions
contained in the Mezzanine Agreement;

 

b)    pursuant to a subordinated intragroup loan
made on 27 February 2002, Concordia loaned Concordia Bus Nordic AB (publ)
(“Nordic”) SEK 501,299,922 (the “Loan”) of which SEK 166,927,467 is outstanding on the date
hereof;

 

c)     pursuant to an agreement dated on or about
the date hereof between Concordia and Nordic the terms of the Loan has been
amended and restated (the “Subordinated Shareholder
Loan Agreement”);

 

d)    pursuant to a sale and assignment agreement
dated on or about the date hereof (the “Transfer Agreement”)
all Concordia’s rights under the Loan and the Subordinated Loan Agreement have
been assigned to the Pledgor; and

 

e)     it is a condition precedent for drawdown of
Tranche C under the Mezzanine Agreement that the Pledgor enters into this
Pledge Agreement and hereby secures the Secured Obligations (as defined below).

 

2

 

IT IS HEREBY AGREED as follows:

 

1.             DEFINITIONS AND INTERPRETATION

 

1.1           In this Agreement:

 

“Finance Documents”
means this Agreement and the Mezzanine Agreement;

 

“Second Ranking Pledge”
means the second ranking pledge granted by the Pledgor over the Security Assets
in favour of Concordia Bus AB;

 

“Secured Obligations”
means all present and future obligations and liabilities (whether actual or
contingent and whether owed jointly or severally or in any other capacity
whatsoever) of the Pledgor to any of the Secured Parties under or pursuant to
the Tranche C Facility and this Agreement, in
each case together with all costs, charges and expenses incurred by any Secured
Party in connection with the protection, preservation or enforcement of its
respective rights against the Pledgor under the Finance Documents;

 

“Secured Parties”
means each and all of the Security Agent and the Facility Agent (as represented
by the Security Agent) on their own behalf and as duly authorized
representative of the Tranche C Facility Lenders; and

 

“Security Assets”
means all the Pledgor’s rights under the Loan and the Subordinated Shareholder
Loan Agreement.

 

1.2           In this Agreement, unless
the contrary intention appears, a reference to:

 

a)      a provision of law is a reference to that
provision as amended or re-enacted,

 

b)      a person includes its successors and assigns,
and

 

c)      any document is a reference to that document
as amended, novated or supplemented.

 

1.3           Terms defined in the
Mezzanine Agreement shall have the same meanings when used in this Agreement
unless otherwise defined in this Agreement.

 

1.4           If
either the Security Agent or the Facility Agent considers that in respect of an
amount paid to a Secured Party under a Finance Document there is a reasonable
risk that such payment will be avoided or otherwise set aside on the
liquidation or bankruptcy of the payer or otherwise, then that amount shall not
be considered to have been irrevocably paid for the purposes of this Agreement.

 

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2.             PLEDGE

 

2.1           The Pledgor hereby
irrevocably and unconditionally, on the terms and conditions set out herein,
pledges to each of the Secured Parties represented by the Security Agent in its
capacity as duly authorized representative for the Secured Parties and on its
own behalf all of the Pledgor’s rights, title and interest in and to the
Security Assets for the purpose of constituting a first ranking pledge to
secure the due and punctual performance of the Secured Obligations.

 

3.             PERFECTION OF PLEDGE

 

3.1           The Pledgor shall
immediately at the execution of this Agreement notify Nordic of the pledge
created hereunder by sending a notice in substantially the form set out in Schedule 1.

 

4.             REPRESENTATIONS
AND WARRANTIES

 

4.1           The Pledgor represents and
warrants to each of the Secured Parties that:

 

a)     it is a limited liability company duly
incorporated and validly existing under the laws of Sweden;

 

b)    the Pledgor has the power to enter into,
deliver and perform, and has taken all necessary action to authorize the entry
into, delivery and performance of this Agreement and the transactions
contemplated by this Agreement;

 

c)     this Agreement constitutes legally valid and
binding obligations of the Pledgor enforceable in accordance with its terms
(except as such enforcement may be limited by any relevant bankruptcy,
insolvency, receivership or similar laws affecting creditors’ rights
generally);

 

d)    this Agreement does not and will not breach
or constitute a default under the constitutional documents of the Pledgor or
any law or regulation by which the Pledgor is bound;

 

e)     this Agreement constitutes a first ranking
pledge, enforceable against the Pledgor, a liquidator or receiver of the
Pledgor and third party creditors of the Pledgor;

 

f)     the Pledgor is the sole, absolute and
beneficial owner of the Security Assets; and

 

4

 

g)    other than as created pursuant to this
Agreement and the Second Ranking Pledge and as otherwise permitted under the
Mezzanine Agreement, the Security Assets are free from any encumbrances.

 

4.2           The representations and
warranties set out in Clause 4.1 above are made on the date of this Agreement.
The representations and warranties set out in Clause 4.1 a) – d) are deemed to
be repeated by the Pledgor on each date for interest payment under the Tranche
C Facility with reference to the facts and circumstances then existing.

 

5.             COVENANTS BY THE PLEDGOR

 

5.1           The Pledgor hereby covenants
with each of the Secured Parties that during the continuance of this Agreement
the Pledgor will:

 

a)      not sell, transfer or otherwise dispose of
the Security Assets or any part thereof or interest therein or permit the same
to occur other than as permitted under the Mezzanine Agreement;

 

b)      not grant any option in or over the Security
Assets;

 

c)      not create or permit to subsist any security
interests on, over, with respect to or otherwise affecting the whole or any
part of the Security Assets (other than (i) the Second Ranking Pledge, (ii) Permitted
Security Interests as defined in the Mezzanine Agreement;

 

d)      not hold any security from any other person
in respect of the Pledgor’s liability under this Agreement; and

 

e)      the
Pledgor shall at any time, if and when required by the Security Agent and at
the Pledgor’s cost, promptly and duly do all such further acts and execute and
deliver any and all such further documents as may in the reasonable opinion of the
Security Agent be necessary in order to give full effect to this Agreement and
to secure to the Security Agent the full benefit of the rights, powers and
remedies conferred upon it in this Agreement, and the Pledgor shall use its
best endeavours to obtain any third party consent where such consent is
required in order to give full effect to such act or document.

 

5.2           Clause 5.1 is subject to Clause 19.18 of the Mezzanine
Agreement, the contents of which shall apply mutatis mutandis to the
restrictions set out in Clause 5.1.

 

5

 

6.             CONTINUING SECURITY

 

6.1           The security constituted by
this Agreement shall be a continuing security and shall not be considered as
satisfied or discharged by any intermediate payment or settlement of the whole
or any part of the Secured Obligations and shall be binding until all the
Secured Obligations have been irrevocably paid or discharged in full.

 

6.2           Until all the Secured
Obligations have been irrevocably paid or discharged in full any Secured Party
may refrain from applying or enforcing any other security, monies or rights
held or received by that Secured Party or apply and enforce the same in such
manner and order as the Secured Party or the Security Agent sees fit and the
Pledgor shall not be entitled to the benefit of the same and waives any right it may have of first requiring a Secured Party or
the Security Agent to proceed against or enforce any other right or security or
claim payment from any other person before enforcing this Agreement.

 

6.3           This Agreement is in
addition to any present and future guarantee, collateral, lien or other
security held by the Security Agent. The Secured Parties’ rights hereunder are
in addition to and not exclusive of those provided by law and may be exercised
from time to time and as often as the Security Agent deems expedient.

 

7.             EXERCISE OF PLEDGE AND APPLICATION OF MONIES

 

7.1           Upon the Security Agent
serving notice on the Pledgor following the occurrence of an Event of Default
demanding the immediate repayment of any outstanding amount of the Secured
Obligations and at all times thereafter, so long as the same shall be
continuing, the Security Agent may, in addition to any other remedies provided
herein or in the Mezzanine Agreement or by applicable law enforce its rights
hereunder in such manner, acting with due care as the Security Agent in its
sole discretion deems fit, and the Security Agent shall not be liable for any
loss arising from or in connection with such enforcement, provided that it has
acted with due care.

 

7.2           All costs and expenses (including
legal fees) incurred by the Security Agent and the Agent in connection with the
enforcement of the security created by this Agreement shall be borne by the
Pledgor and the Pledgor shall indemnify and hold the Security Agent harmless in
respect of such costs and expenses.

 

7.3           Chapter 10 Section 2 of
the Swedish Commercial Code (Sw: Handelsbalken 10:2)
shall not apply to this Agreement.

 

6

 

7.4           All monies received by the
Security Agent under or by virtue of the pledge created by this Agreement or by
law or in exercise of the rights, powers and remedies under this Agreement or
by law shall be applied by the Security Agent in the manner and order set out
in the Mezzanine Agreement.

 

7.5           For
the purpose of enforcing the security created by this Agreement upon the
occurrence of an Event of Default, the Pledgor irrevocably authorizes and
empowers the Security Agent to act in the name of the Pledgor, and on behalf of
the Pledgor to do all acts and take any necessary or appropriate steps in
respect of the sale of the Security Assets. The power of attorney set out in
this Clause 7.5 shall be valid for as long as this Agreement remains in force.

 

8.             DISCHARGE OF THE SECURITY ASSETS

 

8.1           The Security Agent may and,
upon the irrevocable payment or discharge in full of the Secured Obligations,
shall or shall procure that its nominees or agents shall (as the case may be)
at the request and cost of the Pledgor discharge to the Pledgor all the right,
title and interest in or to the Security Assets of the Security Agent and the
Secured Parties free from the security in this Agreement.

 

8.2           Any release, discharge or
settlement between the Pledgor and the Security Agent in relation to this
Agreement shall be conditional upon no disposition or payment to the Security
Agent or any Secured Party by the Pledgor or any other person being avoided,
set aside or ordered to be refunded pursuant to any law relating to insolvency
or for any other reason.

 

8.3           If any such disposition or
payment is avoided, set aside or ordered to be refunded the Pledgor shall
retransfer the Security Assets to the Security Agent and the Security Agent
shall be entitled to enforce this Agreement against the Pledgor as if such
release, discharge or settlement had not occurred and any such disposition or
payment not been made.

 

9.             THE SECURITY AGENT

 

9.1           The Security Agent shall at
all times act as the duly authorized representative (Sw:
befullmäktigat ombud) of the Secured Parties, and shall, when
exercising its rights and fulfilling its obligations under this Agreement,
comply with the relevant provisions of the Mezzanine Agreement.

 

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9.2           The
Security Agent may at any time (i) delegate to any person all or any of
its rights, powers and discretions under this Agreement on such terms
(including the power to sub-delegate) as the Security Agent sees fit and (ii) employ
agents, managers, employees, advisers and others on such terms as the Security
Agent sees fit for any of the purposes set out in this Agreement, provided that
in each such case it uses due care in selecting such delegate.

 

10.          WAIVERS

 

10.1         The liability of the Pledgor
under this Agreement shall not be prejudiced, affected or diminished by any
act, omission, circumstance or matter which but for this provision might
operate or release or otherwise exonerate the Pledgor from its obligations
under this Agreement in whole or in part, including without limitation and
whether or not known to the Pledgor or any Secured Party;

 

a)      any time or waiver granted to or composition
with any other person;

 

b)      the taking, variation, compromise, renewal or
release of or refusal or neglect to perfect or enforce any rights, remedies or
securities against any other person;

 

c)      any legal limitation, disability, incapacity
or other circumstances or the bankruptcy, liquidation or change in the name or
constitution of any other person;

 

d)      any variation or extension, any increase,
exchange, renewal, surrender, release or loss of or failure to perfect any
security or of any non-observance of any formality in respect of any
instruments; and

 

e)      any unenforceability or invalidity of the
Secured Obligations or of any obligations of any other person or security, to
the intent that the Pledgor’s obligations under this Agreement shall remain in
full force and this Agreement be construed accordingly as if there were no such
unenforceability or invalidity.

 

10.2         Any waiver by the Security
Agent or any Secured Party of any terms of this Agreement or any consent or
approval given by any of them under it shall be effective only if given in
writing and then only for the purpose and upon the terms and conditions (if
any) on which it is given. No delay or omission on the part of the Security Agent
or any Secured Party in exercising any right or remedy under this Agreement
shall impair that right or remedy or operate as or be taken to be a waiver of
it nor shall any single, partial or defective exercise of any such right or

 

8

 

remedy preclude any other or
further exercise under this Agreement of that or any other right or remedy.

 

11.          INDEMNITY

 

The Pledgor shall, in
accordance with the terms of Clause 14.3 of the MezzanineAgreement, indemnify
the Security Agent for any costs, expenses and liability as described therein
and for the purpose hereof any reference to “the Borrower” in Clause 14.3 shall
be deemed to be a reference to the Pledgor and any reference to the Finance
Documents should be deemed to be a reference to this Agreement.

 

12.          MISCELLANEOUS

 

12.1         The Pledgor may not assign
any of its rights under this Agreement. Each Secured Party may assign all or
any part of their rights under this Agreement in accordance with, and in
connection with a transfer under, the Mezzanine Agreement.

 

12.2         This Agreement shall remain
in full force and effect notwithstanding any amendments or variations from time
to time to any of the Finance Documents and all references to a Finance
Document herein shall be taken as referring to that Finance Document as amended
or varied from time to time (including, without limitation, any increase in the
amount of the Secured Obligations).

 

12.3         If any provision of this
Agreement is or becomes illegal, invalid or unenforceable that shall not affect
the validity or enforceability of any other provision of this Agreement.

 

12.4         This Agreement may be
executed in any number of counterparts and this shall have the same effect as
if the signatures on the counterparts were on a single copy of this Agreement.

 

12.5         All sums payable by the
Pledgor under this Agreement shall be paid without any set-off, counterclaim,
withholding or deduction whatsoever unless required by law in which event the
Pledgor will, simultaneously with making the relevant payment under this
Agreement, pay to the Security Agent such additional amount as will result in
the receipt by the Security Agent of the full amount which would otherwise have
been receivable and will supply the Security Agent promptly with evidence
satisfactory to the Security Agent that the Pledgor has accounted to the
relevant authority for the sum withheld or deducted.

 

9

 

12.6         Any statement, certificate
or determination of the Security Agent as to the amount of the Secured
Obligations or (without limitation) any other matter provided for in this
Agreement shall in the absence of manifest error be conclusive and binding on
the Pledgor.

 

13.          NOTICES

 

13.1         Each notice or other
communication to be given under this Agreement shall be given in writing in
English and, unless otherwise provided, shall be made by fax or letter.

 

13.2         Any notice or other
communication to be given by one party to another under this Agreement shall
(unless one party has by 15 days’ notice to the other party specified another
address) be given to that other party at the respective addresses given in
Clause 13.3.

 

13.3         The address and fax number
of the Pledgor and the Security Agent are:

 

(A)    the
Pledgor:

 

Concordia Bus Nordic Holding AB

 

Solna Strandväg 78, 171 54 Solna

 

Attention: Chairman of the Board

 

Fax: +46 (0) 8 546 300 10

 

(B)    the
Security Agent:

 

Citicorp Trustee Company Limited

 

Fax: +44 (0) 2 075 005 877

 

13.4         Any notice or other
communication given by one party to another shall be deemed to have been
received:

 

a)      if sent by fax, with a confirmed receipt of
transmission from the sending machine, on the day on which transmitted;

 

b)      in the case of a notice given by hand, on the
day of actual delivery; and

 

10

 

c)      if posted, on the second business day or, in
the case of airmail, the fifth business day following the day on which it was
dispatched by first class mail postage prepaid or, as the case may be, airmail
postage prepaid,

 

provided that a notice given in accordance with the above but received
on a day which is not a business day or after normal business hours in the
place of receipt shall be deemed to have been received on the next business
day.

 

14.          GOVERNING
LAW AND JURISDICTION

 

14.1         This Agreement is governed
by and shall be construed in accordance with Swedish law.

 

14.2         The parties agree that the
courts of Sweden shall have jurisdiction to settle any disputes which may arise
in connection with this Agreement and that any final  (Sw: lagakraftvunnen)
judgment or order of a Swedish court in connection with this Agreement is
conclusive and binding on them and may be enforced against them in the courts
of any other jurisdiction. This Clause 14.2 is for the benefit of the Secured
Parties only and shall not limit the right of any of the Secured Parties to
bring proceedings against the Pledgor in connection with any Finance Document
in any other court of competent jurisdiction or concurrently in more than one
jurisdiction.

 

11

 

Signatories

 

The Pledgor

 

CONCORDIA BUS NORDIC HOLDING AB

 

 

	
  /s/ HARALD ARNKVAERN

  	
   

  

 

 

The Security Agent

 

Citicorp Trustee Company Limited

on its own behalf and as duly authorized

representative for each of the Secured
Parties

 

 

	
  /s/ JILLIAN
  HAMBLIN

  	
   

  

 

12

 

Schedule 1

 

FORM OF NOTICE

 

To:

 

Concordia Bus Nordic AB (publ)

 

 

Dear Sirs,

 

We hereby give you notice that by a pledge agreement of [  ] (the “Pledge Agreement”)
we have pledged to Citicorp Trustee Company Limited (the “Security
Agent”) as security for our obligations under an Mezzanine Agreement
dated [  ], all of our rights under the
Subordinated Loan granted to you by Concordia Bus AB (publ) on 27 February 2002
as amended and restated on [ 2005] (the “Loan”), which
has been transferred to us in accordance with a sale and assignment agreement
dated [          2005].

 

The assets pledged consist of our claim on you under the Loan, and you
are therefore to effect any payment under the Loan in accordance with
instructions received from the Security Agent (to such account as the Security
Agent or its nominee may from time to time designate in writing for this
purpose).

 

We kindly request that you confirm your receipt and acknowledgement of
the above by returning signed copies of this notification to the Security Agent
and ourselves.

 

Concordia Bus Nordic Holding AB

 

 

	
   

  	
   

  
	
   

  
	
  by:

  

 

13

 

We hereby confirm our receipt and
acknowledgement of the above.

 

 

Concordia Bus Nordic AB (publ)

 

 

	
   

  	
   

  
	
   

  
	
  by:

  

 

14Exhibit 4.8

 

CONFORMED COPY

 

PLEDGE
AGREEMENT

 

 

Dated July 18, 2005

 

 

between

 

Concordia Bus Nordic Holding AB

 

as Pledgor

 

and

 

Citicorp Trustee Company Limited

 

as Security Agent

 

 

FIRST RANKING
PLEDGE OF SHAREHOLDERS’ CONTRIBUTION LOAN

 

 

THIS FIRST RANKING PLEDGE
AGREEMENT is dated July 18, 2005 and made between:

 

(1)                                                    CONCORDIA BUS NORDIC
HOLDING AB (a
company incorporated under the laws of Sweden) of c/o Swebus AB, Solna
Strandväg 78, 171 54 Solna, Sweden (corporate identity no 556028-1122), (the “Pledgor”); and

 

(2)                                                    Citicorp Trustee Company
Limited, on its
own behalf and as duly authorized representative of each of the Secured Parties
(the “Security Agent”)

 

WHEREAS:

 

a)                            by a
mezzanine facility agreement (the “Mezzanine Agreement”)
date on or about the date hereof and made between
the Pledgor and Concordia Bus AB (publ) (“Concordia”) as borrowers, Deutsche Bank Luxembourg S.A. as
facility agent, the financial institutions defined as Tranche C Facility
Lenders in the Mezzanine Agreement and the Security Agent, the Tranche C
Facility Lenders have agreed to make available a Tranche C Facility (as defined
in the Mezzanine Agreement) on the terms and conditions contained in the
Mezzanine Agreement;

 

b)                           Concordia
Bus Nordic AB (publ) (“Nordic”) has
undertaken in February 2003 to make a shareholders’ contribution to
Concordia (the “Contribution”), none of which has
been paid by Nordic on the date hereof and Bus consequently had a claim on
Nordic in the same amount;

 

c)                            pursuant
to a sale and assignment agreement dated on or about the date hereof (the “Transfer Agreement”) a part in the amount of SEK 80,000,000
(the “Loan”) of Concordia’s rights to the
Contribution has been assigned to the Pledgor and such part of the claim has
been evidenced by an agreement made between Nordic and the Pledgor dated on or
about the date hereof (the “Contribution Loan
Agreement”); and

 

d)                           it
is a condition precedent for drawdown of Tranche C under the Mezzanine
Agreement that the Pledgor enters into this Pledge Agreement and hereby secures
the Secured Obligations (as defined below).

 

IT IS HEREBY AGREED as follows:

 

1.                                               DEFINITIONS AND INTERPRETATION

 

1.1                                          In
this Agreement:

 

2

 

“Finance Documents”
means this Agreement and the Mezzanine Agreement;

 

“Second Ranking Pledge”
means the second ranking pledge granted by the Pledgor over the Security Assets
in favour of Concordia Bus AB;

 

“Secured Obligations”
means all present and future obligations and liabilities (whether actual or
contingent and whether owed jointly or severally or in any other capacity
whatsoever) of the Pledgor to any of the Secured Parties under or pursuant to
the Tranche C Facility and this Agreement, in
each case together with all costs, charges and expenses incurred by any Secured
Party in connection with the protection, preservation or enforcement of its
respective rights against the Pledgor under the Finance Documents;

 

“Secured Parties”
means each and all of the Security Agent and the Facility Agent (as represented
by the Security Agent) on their own behalf and as duly authorized
representative of the Tranche C Facility Lenders; and

 

“Security Assets”
means all the Pledgor’s rights under the Loan and the Contribution Loan
Agreement in respect thereof.

 

1.2                                          In
this Agreement, unless the contrary intention appears, a reference to:

 

a)                  a
provision of law is a reference to that provision as amended or re-enacted,

 

b)                 a
person includes its successors and assigns, and

 

c)                  any
document is a reference to that document as amended, novated or supplemented.

 

1.3                                          Terms
defined in the Mezzanine Agreement shall have the same meanings when used in
this Agreement unless otherwise defined in this Agreement.

 

1.4                                          If either the Security Agent or the Facility Agent considers that in
respect of an amount paid to a Secured Party under a Finance Document there is
a reasonable risk that such payment will be avoided or otherwise set aside on
the liquidation or bankruptcy of the payer or otherwise, then that amount shall
not be considered to have been irrevocably paid for the purposes of this
Agreement.

 

2.                                               PLEDGE

 

2.1                                          The
Pledgor hereby irrevocably and unconditionally, on the terms and conditions set
out herein, pledges to each of the Secured Parties represented by the Security
Agent in its capacity as duly authorized representative for the Secured Parties
and on its own behalf all of the Pledgor’s rights, title and interest in and to
the Security Assets for the purpose of constituting a first ranking pledge to
secure the due and punctual performance of the Secured Obligations.

 

3

 

3.                                               PERFECTION OF PLEDGE

 

3.1                                          The
Pledgor shall immediately at the execution of this Agreement notify Nordic of
the pledge created hereunder by sending a notice in substantially the form set
out in Schedule 1.

 

4.                                               REPRESENTATIONS
AND WARRANTIES

 

4.1                                          The
Pledgor represents and warrants to each of the Secured Parties that:

 

a)                  it
is a limited liability company duly incorporated and validly existing under the
laws of Sweden;

 

b)                 the
Pledgor has the power to enter into, deliver and perform, and has taken all
necessary action to authorize the entry into, delivery and performance of this
Agreement and the transactions contemplated by this Agreement;

 

c)                  this
Agreement constitutes legally valid and binding obligations of the Pledgor
enforceable in accordance with its terms (except as such enforcement may be
limited by any relevant bankruptcy, insolvency, receivership or similar laws
affecting creditors’ rights generally);

 

d)                 this
Agreement does not and will not breach or constitute a default under the
constitutional documents of the Pledgor or any law or regulation by which the
Pledgor is bound;

 

e)                  this
Agreement constitutes a first ranking pledge, enforceable against the Pledgor, a
liquidator or receiver of the Pledgor and third party creditors of the Pledgor;

 

f)                    the
Pledgor is the sole, absolute and beneficial owner of the Security Assets; and

 

g)                 other
than as created pursuant to this Agreement and the Second Ranking Pledge and as
otherwise permitted under the Mezzanine Agreement, the Security Assets are free
from any encumbrances.

 

4.2                                          The
representations and warranties set out in Clause 4.1 above are made on the date
of this Agreement. The representations and warranties set out in Clause 4.1 a)
– d) are deemed to be repeated by the Pledgor on each date for interest payment
under the Tranche C Facility with reference to the facts and circumstances then
existing.

 

4

 

5.                                               COVENANTS BY THE PLEDGOR

 

5.1                                          The
Pledgor hereby covenants with each of the Secured Parties that during the
continuance of this Agreement the Pledgor will:

 

a)                  not
sell, transfer or otherwise dispose of the Security Assets or any part thereof
or interest therein or permit the same to occur other than as permitted under
the Mezzanine Agreement;

 

b)                 not
grant any option in or over the Security Assets;

 

c)                  not
create or permit to subsist any security interests on, over, with respect to or
otherwise affecting the whole or any part of the Security Assets (other than (i) the
Second Ranking Pledge, (ii) Permitted Security Interests as defined in the
Mezzanine Agreement;

 

d)                 not
hold any security from any other person in respect of the Pledgor’s liability
under this Agreement; and

 

e)                  the
Pledgor shall at any time, if and when required by the Security Agent and at
the Pledgor’s cost, promptly and duly do all such further acts and execute and
deliver any and all such further documents as may in the reasonable opinion of
the Security Agent be necessary in order to give full effect to this Agreement
and to secure to the Security Agent the full benefit of the rights, powers and
remedies conferred upon it in this Agreement, and the Pledgor shall use its
best endeavours to obtain any third party consent where such consent is
required in order to give full effect to such act or document.

 

5.2                                          Clause 5.1 is subject to Clause 19.18 of the Mezzanine Agreement, the
contents of which shall apply mutatis mutandis to the restrictions set out in Clause
5.1.

 

6.                                               CONTINUING SECURITY

 

6.1                                          The
security constituted by this Agreement shall be a continuing security and shall
not be considered as satisfied or discharged by any intermediate payment or
settlement of the whole or any part of the Secured Obligations and shall be
binding until all the Secured Obligations have been irrevocably paid or
discharged in full.

 

6.2                                          Until
all the Secured Obligations have been irrevocably paid or discharged in full
any Secured Party may refrain from applying or enforcing any other security,
monies or rights held or received by that Secured Party or apply and enforce
the same in such manner and order as the Secured Party or the Security Agent
sees fit and the Pledgor shall not be entitled to the benefit of the same and waives any right it may have of first requiring a Secured Party or
the Security Agent to proceed

 

5

 

against
or enforce any other right or security or claim payment from any other person
before enforcing this Agreement.

 

6.3                                          This
Agreement is in addition to any present and future guarantee, collateral, lien
or other security held by the Security Agent. The Secured Parties’ rights
hereunder are in addition to and not exclusive of those provided by law and may
be exercised from time to time and as often as the Security Agent deems
expedient.

 

7.                                               EXERCISE OF PLEDGE AND APPLICATION OF MONIES

 

7.1                                          Upon
the Security Agent serving notice on the Pledgor following the occurrence of an
Event of Default demanding the immediate repayment of any outstanding amount of
the Secured Obligations and at all times thereafter, so long as the same shall
be continuing, the Security Agent may, in addition to any other remedies
provided herein or in the Mezzanine Agreement or by applicable law enforce its
rights hereunder in such manner, acting with due care as the Security Agent in
its sole discretion deems fit, and the Security Agent shall not be liable for
any loss arising from or in connection with such enforcement, provided that it has
acted with due care.

 

7.2                                          All
costs and expenses (including legal fees) incurred by the Security Agent and
the Agent in connection with the enforcement of the security created by this
Agreement shall be borne by the Pledgor and the Pledgor shall indemnify and
hold the Security Agent harmless in respect of such costs and expenses.

 

7.3                                          Chapter
10 Section 2 of the Swedish Commercial Code (Sw:
Handelsbalken 10:2) shall not apply to this Agreement.

 

7.4                                          All
monies received by the Security Agent under or by virtue of the pledge created
by this Agreement or by law or in exercise of the rights, powers and remedies
under this Agreement or by law shall be applied by the Security Agent in the
manner and order set out in the Mezzanine Agreement.

 

7.5                                          For the purpose of enforcing the security created by this Agreement upon
the occurrence of an Event of Default, the Pledgor irrevocably authorizes and
empowers the Security Agent to act in the name of the Pledgor, and on behalf of
the Pledgor to do all acts and take any necessary or appropriate steps in
respect of the sale of the Security Assets. The power of attorney set out in
this Clause 7.5 shall be valid for as long as this Agreement remains in force.

 

6

 

8.                                               DISCHARGE OF THE SECURITY ASSETS

 

8.1                                          The
Security Agent may and, upon the irrevocable payment or discharge in full of
the Secured Obligations, shall or shall procure that its nominees or agents
shall (as the case may be) at the request and cost of the Pledgor discharge to
the Pledgor all the right, title and interest in or to the Security Assets of
the Security Agent and the Secured Parties free from the security in this
Agreement.

 

8.2                                          Any
release, discharge or settlement between the Pledgor and the Security Agent in
relation to this Agreement shall be conditional upon no disposition or payment
to the Security Agent or any Secured Party by the Pledgor or any other person
being avoided, set aside or ordered to be refunded pursuant to any law relating
to insolvency or for any other reason.

 

8.3                                          If
any such disposition or payment is avoided, set aside or ordered to be refunded
the Pledgor shall retransfer the Security Assets to the Security Agent and the
Security Agent shall be entitled to enforce this Agreement against the Pledgor
as if such release, discharge or settlement had not occurred and any such
disposition or payment not been made.

 

9.                                               THE SECURITY AGENT

 

9.1                                          The
Security Agent shall at all times act as the duly authorized representative (Sw: befullmäktigat ombud) of the Secured Parties, and shall,
when exercising its rights and fulfilling its obligations under this Agreement,
comply with the relevant provisions of the Mezzanine Agreement.

 

9.2                                          The Security Agent may at any time (i) delegate to any person all
or any of its rights, powers and discretions under this Agreement on such terms
(including the power to sub-delegate) as the Security Agent sees fit and (ii) employ
agents, managers, employees, advisers and others on such terms as the Security
Agent sees fit for any of the purposes set out in this Agreement, provided that
in each such case it uses due care in selecting such delegate.

 

10.                                        WAIVERS

 

10.1                                    The
liability of the Pledgor under this Agreement shall not be prejudiced, affected
or diminished by any act, omission, circumstance or matter which but for this
provision might operate or release or otherwise exonerate the Pledgor from its
obligations under this Agreement in whole or in part, including without
limitation and whether or not known to the Pledgor or any Secured Party;

 

a)                  any
time or waiver granted to or composition with any other person;

 

7

 

b)                 the
taking, variation, compromise, renewal or release of or refusal or neglect to
perfect or enforce any rights, remedies or securities against any other person;

 

c)                  any
legal limitation, disability, incapacity or other circumstances or the
bankruptcy, liquidation or change in the name or constitution of any other
person;

 

d)                 any
variation or extension, any increase, exchange, renewal, surrender, release or
loss of or failure to perfect any security or of any non-observance of any
formality in respect of any instruments; and

 

e)                  any
unenforceability or invalidity of the Secured Obligations or of any obligations
of any other person or security, to the intent that the Pledgor’s obligations
under this Agreement shall remain in full force and this Agreement be construed
accordingly as if there were no such unenforceability or invalidity.

 

10.2                                    Any
waiver by the Security Agent or any Secured Party of any terms of this
Agreement or any consent or approval given by any of them under it shall be
effective only if given in writing and then only for the purpose and upon the
terms and conditions (if any) on which it is given. No delay or omission on the
part of the Security Agent or any Secured Party in exercising any right or
remedy under this Agreement shall impair that right or remedy or operate as or
be taken to be a waiver of it nor shall any single, partial or defective exercise
of any such right or remedy preclude any other or further exercise under this
Agreement of that or any other right or remedy.

 

11.                                        INDEMNITY

 

The Pledgor
shall, in accordance with the terms of Clause 14.3 of the MezzanineAgreement,
indemnify the Security Agent for any costs, expenses and liability as described
therein and for the purpose hereof any reference to “the Borrower” in Clause
14.3 shall be deemed to be a reference to the Pledgor and any reference to the
Finance Documents should be deemed to be a reference to this Agreement.

 

12.                                        MISCELLANEOUS

 

12.1                                    The
Pledgor may not assign any of its rights under this Agreement. Each Secured
Party may assign all or any part of their rights under this Agreement in
accordance with, and in connection with a transfer under, the Mezzanine
Agreement.

 

8

 

12.2                                    This
Agreement shall remain in full force and effect notwithstanding any amendments
or variations from time to time to any of the Finance Documents and all references
to a Finance Document herein shall be taken as referring to that Finance
Document as amended or varied from time to time (including, without limitation,
any increase in the amount of the Secured Obligations).

 

12.3                                    If
any provision of this Agreement is or becomes illegal, invalid or unenforceable
that shall not affect the validity or enforceability of any other provision of
this Agreement.

 

12.4                                    This
Agreement may be executed in any number of counterparts and this shall have the
same effect as if the signatures on the counterparts were on a single copy of
this Agreement.

 

12.5                                    All
sums payable by the Pledgor under this Agreement shall be paid without any set-off,
counterclaim, withholding or deduction whatsoever unless required by law in
which event the Pledgor will, simultaneously with making the relevant payment
under this Agreement, pay to the Security Agent such additional amount as will
result in the receipt by the Security Agent of the full amount which would
otherwise have been receivable and will supply the Security Agent promptly with
evidence satisfactory to the Security Agent that the Pledgor has accounted to
the relevant authority for the sum withheld or deducted.

 

12.6                                    Any
statement, certificate or determination of the Security Agent as to the amount
of the Secured Obligations or (without limitation) any other matter provided
for in this Agreement shall in the absence of manifest error be conclusive and
binding on the Pledgor.

 

13.                                        NOTICES

 

13.1                                    Each
notice or other communication to be given under this Agreement shall be given
in writing in English and, unless otherwise provided, shall be made by fax or
letter.

 

13.2                                    Any
notice or other communication to be given by one party to another under this
Agreement shall (unless one party has by 15 days’ notice to the other party
specified another address) be given to that other party at the respective
addresses given in Clause 13.3.

 

13.3                                    The
address and fax number of the Pledgor and the Security Agent are:

 

(A)            the Pledgor:

 

Concordia Bus Nordic Holding AB

 

9

 

Solna Strandväg 78, 171 54 Solna

 

Attention: Chairman of the Board

 

Fax: +46 8 546 300 10

 

(B)              the Security Agent:

 

Citicorp Trustee Company Limited

 

Fax: +44 (0) 2 075 005 877

 

13.4                                    Any
notice or other communication given by one party to another shall be deemed to
have been received:

 

a)                  if
sent by fax, with a confirmed receipt of transmission from the sending machine,
on the day on which transmitted;

 

b)                 in
the case of a notice given by hand, on the day of actual delivery; and

 

c)                  if
posted, on the second business day or, in the case of airmail, the fifth
business day following the day on which it was dispatched by first class mail
postage prepaid or, as the case may be, airmail postage prepaid,

 

provided that a notice given in accordance with the
above but received on a day which is not a business day or after normal
business hours in the place of receipt shall be deemed to have been received on
the next business day.

 

14.                                        GOVERNING LAW AND JURISDICTION

 

14.1                                    This
Agreement is governed by and shall be construed in accordance with Swedish law.

 

14.2                                    The
parties agree that the courts of Sweden shall have jurisdiction to settle any
disputes which may arise in connection with this Agreement and that any final (Sw: lagakraftvunnen) judgment or order of a Swedish court in
connection with this Agreement is conclusive and binding on them and may be
enforced against them in the courts of any other jurisdiction. This Clause 14.2
is for the benefit of the Secured Parties only and shall not limit the right of
any of the Secured Parties to bring proceedings against the Pledgor in
connection with any Finance Document in any other court of competent
jurisdiction or concurrently in more than one jurisdiction.

 

10

 

Signatories

 

The Pledgor

 

CONCORDIA BUS NORDIC
HOLDING AB

 

 

	
  /s/ HARALD ARNKVAERN

  	
   

  

 

The Security Agent

 

 

Citicorp Trustee Company
Limited

on its own behalf and as
duly authorized

representative for each of
the Secured Parties

 

 

	
  /s/ JILLIAN
  HAMBLIN

  	
   

  

 

11

 

Schedule 1

 

FORM OF NOTICE

 

To:

 

Concordia Bus Nordic AB
(publ)

 

 

Dear Sirs,

 

 

You have undertaken to make a shareholders’ contribution to Concordia
Bus AB (publ) in the amount of SEK 108,273,353 and Concordia Bus AB (publ) has
a claim on you in that amount. Of that claim, Concordia Bus AB (publ) has
transferred to us all of its rights to an amount of SEK 80,000,000 (the “Transferred Amount”) and your obligation to pay the
Transferred Amount has been evidenced by a shareholders’ contribution loan
agreement dated on or about the date hereof.

 

We hereby give you notice that by a pledge agreement of [  ] (the “Pledge Agreement”)
we have pledged to Citicorp Trustee Company Limited (the “Security
Agent”) as security for our obligations under a Mezzanine Agreement
dated [  ], all of our rights to the
Transferred Amount and under the shareholders’ contribution loan agreement in
respect thereof.

 

The assets pledged consist of our claim on you to payment of the
Transferred Amount, and you are therefore to effect any payment of the
Transferred Amount Contribution in accordance with instructions received from
the Security Agent (to such account as the Security Agent or its nominee may
from time to time designate in writing for this purpose).

 

We kindly request that you confirm your receipt and acknowledgement of
the above by returning signed copies of this notification to the Security Agent
and ourselves.

 

Concordia Bus Nordic Holding
AB

 

 

	
   

  	
   

  
	
   

  
	
  by:

  

 

12

 

We hereby confirm our
receipt and acknowledgement of the above.

 

 

	
  Concordia
  Bus Nordic AB (publ)

  
	
   

  
	
   

  
	
   

  	
   

  
	
   

  
	
  by:

  

 

13

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