Document:

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                                                                  EXHIBIT 4.1(b)

                               GUARANTY AGREEMENT

         This FIRST AMENDED AND RESTATED GUARANTY AGREEMENT (this "Guaranty"),
dated as of July 17,2001, is made by ALEXANDER CITY CASTING COMPANY, INC., a
corporation organized and existing under the laws of the State of Alabama,
CAST-MATIC CORPORATION, a corporation organized and existing under the laws of
the State of Michigan, COLUMBUS FOUNDRY L.P., a limited partnership organized
and existing under the laws of the State of Delaware, DIVERSIFIED DIEMAKERS,
INC, a corporation organized and existing under the laws of the State of
Delaware, GANTON TECHNOLOGIES INC., a corporation organized and existing under
the laws of the State of Illinois, FRISBY P.M.C., INCORPORATED, a corporation
organized and existing under the laws of the State of Illinois, INTERMET HOLDING
COMPANY, a corporation organized and existing under the laws of the State of
Delaware, INTERMET INTERNATIONAL, INC., a corporation organized and existing
under the laws of the State of Georgia, IRONTON IRON INC., a corporation
organized and existing under the laws of the State of Ohio, LYNCHBURG FOUNDRY
COMPANY, a corporation organized and existing under the laws of the Commonwealth
of Virginia, NORTHERN CASTINGS CORPORATION, a corporation organized and existing
under the laws of the State of Georgia, SUDBURY, INC., a corporation organized
and existing under the laws of the State of Delaware, SUDM, INC., a corporation
organized and existing under the laws of the State of Michigan, TOOL PRODUCTS,
INC., a corporation organized and existing under the laws of the State of
Delaware, WAGNER CASTINGS COMPANY, a corporation organized and existing under
the laws of the State of Delaware and WAGNER HAVANA, INC., a corporation
organized and existing under the laws of the State of Delaware, and the other
subsidiaries of Intermet Corporation (the "Borrower") that execute and deliver a
supplement hereto from time to time (the foregoing Persons individually a
"Guarantor" and collectively the "Guarantors"), in favor of THE BANK OF NOVA
SCOTIA, a Canadian chartered bank acting through its Atlanta Agency (in such
capacity, the "Administrative Agent"), in its capacity as administrative and
collateral agent for the banks and other lending institutions parties to the
Credit Agreement (as hereinafter defined) and each assignee thereof becoming a
"Lender" as provided therein (the "Lenders"; the Lenders and the Administrative
Agent and their respective Affiliates being collectively referred to herein as
the "Guaranteed Parties").

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                               W I T N E S S E T H

         WHEREAS, the Borrower has requested, and the Administrative Agent and
Lenders have agreed subject to the terms and conditions of this Agreement, to
make available to the Borrower a revolving credit facility with a letter of
credit subfacility and a swingline loan subfacility;

         WHEREAS, the Borrower, the Lenders, the Administrative Agent, Bank One,
Michigan, as Syndication Agent, and SunTrust Bank, as Documentation Agent have
entered into that certain Five-Year Credit Agreement dated as of November 5,
1999 as amended through the Fourth Amendment thereto dated July 17,200l (the
"Fourth Amendment") (as the same may hereafter be further amended, restated,
supplemented or otherwise modified from time to time, and including all
schedules, riders, and supplements thereto, the "Credit Agreement"; terms
defined therein and not otherwise defined herein being used herein as therein
defined);

         WHEREAS, the Borrower owns, directly or indirectly, all or a majority
of the outstanding Capital Securities of each of the Guarantors;

         WHEREAS, the Borrower and Guarantors share an identity of interest as
members of a consolidated group of companies engaged in substantially similar
businesses with the Borrower providing certain centralized financial, accounting
and/or management services to each of the Guarantors;

         WHEREAS, consummation of the transactions pursuant to the Credit
Agreement will enhance the overall financial strength and stability of the
Borrower's entire corporate group, including the Guarantors;

         WHEREAS, the Guarantors, the Lenders and the Administrative Agent are
parties to a Guaranty Agreement dated as of November 5, 1999 with respect to the
Credit Agreement (the "Existing Guaranty Agreement");

         WHEREAS, it is a condition precedent to the effectiveness of the Fourth
Amendment and the Lenders' obligations to make extensions of credit under the
Credit Agreement that Guarantors execute and deliver this Guaranty, and the
Guarantors desire to execute and deliver this Guaranty to satisfy such condition
precedent;

         WHEREAS, the Guarantors, the Lenders and the Administrative Agent wish
to restate the Existing Guaranty Agreement in its entirety with the terms
contained herein; and

         WHEREAS, the Guarantors intend that this Guaranty not effect a novation
of their obligations under the Existing Guaranty Agreement, but merely a
restatement, and where applicable, an amendment to the terms governing such
obligations.

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         NOW, THEREFORE, in consideration of the premises and in order to induce
the Guaranteed Parties to enter into and perform their obligations under the
Fourth Amendment, the Credit Agreement and the other Credit Documents, the
Guarantors hereby jointly and severally agree that the Existing Guaranty
Agreement shall be amended and restated in its entirety to read as follows:

         SECTION 1. GUARANTY. The Guarantors hereby jointly and severally,
irrevocably and unconditionally, guarantee the punctual payment when due,
whether at stated maturity, by acceleration or otherwise, of all Loans and all
other Obligations owing by the Borrower and its Subsidiaries to the Lenders or
the Administrative Agent or their respective Affiliates, or any of them, under
the Credit Agreement, the Notes and the other Credit Documents, including,
without limitation, all renewals, extensions, modifications and refinancings
thereof and all Cash Management Obligations, now or hereafter owing, whether for
principal, interest, fees, expenses or otherwise, and any and all reasonable
out-of-pocket expenses (including reasonable attorneys' fees actually incurred)
and expenses incurred by the Administrative Agent in enforcing any rights under
this Guaranty (the "Guaranteed Obligations"), including without limitation, all
interest which, but for the filing of a petition in bankruptcy with respect to
the Borrower, would accrue on any principal portion of the Guaranteed
Obligations. Any and all payments by the Guarantors hereunder shall be made free
and clear of and without deduction for any set-off, counterclaim, or withholding
so that, in each case, each Guaranteed Party will receive, after giving effect
to any Taxes (as such term is defined in the Credit Agreement, but excluding
Taxes imposed on overall net income of the Guaranteed Party to the same extent
as excluded pursuant to the Credit Agreement), the full amount that it would
otherwise be entitled to receive with respect to the Guaranteed Obligations (but
without duplication of amounts for Taxes already included in the Guaranteed
Obligations). The Guarantors acknowledge and agree that this is a guarantee of
payment when due, and not of collection, and that this Guaranty may be enforced
up to the full amount of the Guaranteed Obligations without proceeding against
the Borrower, against any security for the Guaranteed Obligations, against any
other Guarantor or under any other guaranty covering any portion of the
Guaranteed Obligations.

         SECTION 2. GUARANTY ABSOLUTE. The Guarantors guarantee that the
Guaranteed Obligations will be paid strictly in accordance with the terms of the
Credit Documents, regardless of any law, regulation or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the rights of any
Guaranteed Party with respect thereto. The liability of each Guarantor under
this Guaranty shall be absolute and unconditional in accordance with its terms
and shall remain in full force and effect without regard to, and shall not be
released, suspended, discharged, terminated or otherwise affected by, any
circumstance or occurrence whatsoever, including, without limitation, the
following (whether or not such Guarantor consents thereto or has notice
thereof):

                  (a) any change in the time, place or manner of payment of, or
            in any other term of, all or any of the Guaranteed Obligations, any
            waiver, indulgence, renewal, extension, amendment or modification
            of, or addition, consent or supplement to, or deletion from, or any
            other action or inaction under or in respect of, the Credit

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         Agreement, the other Credit Documents, or any other documents,
         instruments or agreements relating to the Guaranteed Obligations or any
         other instrument or agreement referred to therein or any assignment or
         transfer of any thereof;

                  (b) any lack of validity or enforceability of the Credit
         Agreement, the other Credit Documents, or any other document,
         instrument or agreement referred to therein or any assignment or
         transfer of any thereof;

                  (c) any furnishing to the Guaranteed Parties of any additional
         security for the Guaranteed Obligations, or any sale, exchange, release
         or surrender of, or realization on, any security for the Guaranteed
         Obligations;

                  (d) any settlement or compromise of any of the Guaranteed
         Obligations, any security therefor, or any liability of any other party
         with respect to the Guaranteed Obligations, or any subordination of the
         payment of the Guaranteed Obligations to the payment of any other
         liability of the Borrower;

                  (e) any bankruptcy, insolvency, reorganization, composition,
         adjustment, dissolution, liquidation or other like proceeding relating
         to any Guarantor or the Borrower, or any action taken with respect to
         this Guaranty by any trustee or receiver, or by any court, in any such
         proceeding;

                  (f) any nonperfection of any security interest or lien on any
         collateral, or any amendment or waiver of, consent to, or departure
         from, any guaranty or security for all or any of the Guaranteed
         Obligations;

                  (g) any application of sums paid by the Borrower or any other
         Person with respect to the Obligations of the Borrower to the
         Guaranteed Parties, regardless of what Obligations of the Borrower
         remain unpaid;

                  (h) any act or failure to act by any Guaranteed Party which
         may adversely affect a Guarantor's subrogation rights, if any, against
         the Borrower to recover payments made under this Guaranty; and

                  (i) any other circumstance which might otherwise constitute a
         defense available to, or a discharge of, any Guarantor.

If claim is ever made upon any Guaranteed Party for repayment or recovery of any
amount or amounts received in payment or on account of any of the Guaranteed
Obligations, and any Guaranteed Party repays all or part of said amount by
reason of (a) any judgment, decree or order of any court or administrative body
having jurisdiction over such Guaranteed Party or any of its property, or (b)
any settlement or compromise of any such claim effected by such Guaranteed Party
with any such claimant (including the Borrower or a trustee in bankruptcy for
the Borrower), then and in such event the Guarantors agree that any such
judgment, decree,

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order, settlement or compromise shall be binding on it, notwithstanding any
revocation hereof or the cancellation of the Credit Agreement, the other Credit
Documents, or any other instrument evidencing any liability of the Borrower, and
the Guarantors shall be and remain liable to such Guaranteed Party for the
amounts so repaid or recovered to the same extent as if such amount had never
originally been paid to such Guaranteed Party.

          SECTION 3. WAIVER. The Guarantors hereby waive notice of acceptance of
 this Guaranty, notice of any Obligations to which it may apply, and further
 waive presentment, demand of payment, protest, notice of dishonor or nonpayment
 of any such Obligations, suit or taking of other action by the Guaranteed
 Parties against, and any other notice to, the Borrower or any other party
 liable with respect to the Guaranteed Obligations (including the Guarantors or
 any other Person executing a guaranty of the obligations of the Borrower).

          SECTION 4. WAIVER OF SUBROGATION; CONTRIBUTION. No Guarantor will
 exercise any rights against the Borrower which it may acquire by way of
 subrogation or contribution, by any payment made hereunder or otherwise and
 each of the Guarantors hereby expressly waives any claim, right or remedy which
 the Guarantors may now have or hereafter acquire against the Borrower that
 arises hereunder and/or from the performance by the Guarantors hereunder,
 including, without limitation, any claim, right or remedy of any Guaranteed
 Party against the Borrower or any security which any Guaranteed Party now has
 or hereafter acquires, whether or not such claim, right or remedy arises in
 equity, under contract, by statute, under color of law or otherwise unless and
 until the Guaranteed Obligations have been indefeasibly paid in full.

          In the event that any Guarantor (the "Funding Guarantor") shall make
 any payment or payments under this Guaranty or shall suffer any loss as a
 result of any realization upon any collateral granted by it to secure its
 obligations hereunder, each other Guarantor (each, a "Contributing Guarantor")
 hereby agrees to contribute to the Funding Guarantor an amount equal to such
 Contributing Guarantor's pro rata share of such payment or payments made, or
 losses suffered, by such Funding Guarantor determined by reference to the ratio
 of (a) the dollar amount of the percentage of each such Contributing
 Guarantor's Net Assets (without giving effect to any right to receive any
 contribution or subrogation or obligation to make any contribution hereunder),
 to (b) the sum of the Net Assets of all Guarantors (including the Funding
 Guarantor) hereunder (without giving effect to any right to receive
 contribution or subrogation hereunder or any obligation to make any
 contribution hereunder); provided, that the Contributing Guarantor shall not be
 obligated to make any such payment to the Funding Guarantor if the Contributing
 Guarantor is not solvent at the time of such contribution or if the
 Contributing Guarantor would be rendered not solvent as a result thereof.
 Nothing in this Section shall affect each Guarantor's several liability for the
 entire amount of the Guaranteed Obligations, subject only to the limitations
 set forth in Section 15. For the purposes of this Section 4, (x) the "Net
 Assets" of any Guarantor shall mean the highest amount, as of any Determination
 Date, by which (A) the aggregate present fair saleable value of the assets of
 such Guarantor exceeds (B) the amount of all the debts and liabilities of such
 Guarantor (including contingent, subordinated, unmatured and unliquidated
 liabilities, but excluding the obligations of such Guarantor hereunder), and
 (y) "Determination Date" shall mean each of (1) the Fourth

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Amendment Date, (2) the date of commencement of a case under the Bankruptcy Code
in which a Guarantor is a debtor, and (3) the date enforcement hereunder is
sought with respect to such Guarantor. Each Funding Guarantor covenants and
agrees that its right to receive any contribution from any Contributing
Guarantor hereunder shall be subordinated and junior in right of payment in full
of all of the Guaranteed Obligations.

          SECTION 5. SEVERABILITY. Any provision of this Guaranty which is
 prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
 be ineffective to the extent of such prohibition or unenforceability without
 invalidating the remaining provisions hereof, and any such prohibition or
 unenforceability in any jurisdiction shall not invalidate or render
 unenforceable such provision in any other jurisdiction.

          SECTION 6. AMENDMENTS, ETC. No amendment or waiver of any provision of
 this Guaranty nor consent to any departure by a Guarantor therefrom shall in
 any event be effective unless the same shall be in writing executed by the
 Administrative Agent.

          SECTION 7. NOTICES. All notices and other communications provided for
 hereunder shall be given in the manner specified in the Credit Agreement (i) in
 the case of the Administrative Agent, at the address specified for the
 Administrative Agent in the Credit Agreement, and (ii) in the case of the
 Guarantors, at the respective addresses specified for such Guarantors in this
 Guaranty.

          SECTION 8. NO WAIVER; REMEDIES. No failure on the part of the
 Administrative Agent or other Guaranteed Parties to exercise, and no delay in
 exercising, any right hereunder shall operate as a waiver thereof; nor shall
 any single or partial exercise of any right hereunder preclude any other or
 further exercise thereof or the exercise of any other right. No notice to or
 demand on any Guarantor in any case shall entitle such Guarantor to any other
 further notice or demand in any similar or other circumstances or constitute a
 waiver of the rights of the Administrative Agent or other Guaranteed Parties to
 any other or further action in any circumstances without notice or demand. The
 remedies herein provided are cumulative and not exclusive of any remedies
 provided by law.

           SECTION 9. RIGHT OF SET OFF. In addition to and not in limitation of
  all rights of offset that the Administrative Agent or other Guaranteed Parties
  may have under applicable law, the Administrative Agent and the other
  Guaranteed Parties shall, upon the occurrence of any Event of Default and
  whether or not the Administrative Agent or other Guaranteed Parties have made
  any demand or the Guaranteed Obligations are matured, have the right to
  appropriate and apply to the payment of the Guaranteed Obligations, all
  deposits of any Guarantor (general or special, time or demand, provisional or
  final) then or thereafter held by and other indebtedness or property, then or
  thereafter owing by the Administrative Agent or other Guaranteed Parties to
  any Guarantor, whether or not related to this Guaranty or any transaction
  hereunder. The Guaranteed Parties shall promptly notify the relevant Guarantor
  of any offset hereunder.

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         SECTION 10. CONTINUING GUARANTY; TRANSFER OF OBLIGATIONS. This Guaranty
is a continuing guaranty and shall (i) remain in full force and effect until
payment in full of the Guaranteed Obligations and all other amounts payable
under this Guaranty and the termination of the Commitments, (ii) be binding upon
each Guarantor, its successors and assigns, and (iii) inure to the benefit of
and be enforceable by the Administrative Agent, its successors, transferees and
assigns, for the benefit of the Guaranteed Parties.

         SECTION 11. GOVERNING LAW; APPOINTMENT OF AGENT FOR SERVICE OF
PROCESS; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL.

         (a) THIS GUARANTY WILL BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH
PURPOSE SECTION 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF
NEW YORK).

         (b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY OR
OTHERWISE RELATED HERETO MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK
OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND,
BY EXECUTION AND DELIVERY OF THIS GUARANTY, EACH GUARANTOR HEREBY CONSENTS, FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE JURISDICTION OF THE AFORESAID
COURTS SOLELY FOR THE PURPOSE OF ADJUDICATING ITS RIGHTS OR THE RIGHTS OF THE
ADMINISTRATIVE AGENT AND OTHER GUARANTEED PARTIES WITH RESPECT TO THIS GUARANTY
OR ANY DOCUMENT RELATED HERETO. EACH GUARANTOR HEREBY IRREVOCABLY DESIGNATES
UNITED STATES CORPORATION COMPANY AS THE DESIGNEE, APPOINTEE AND AGENT OF SUCH
GUARANTOR TO RECEIVE, FOR AND ON BEHALF OF SUCH GUARANTOR, SERVICE OR PROCESS IN
SUCH JURISDICTION IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
GUARANTY OR ANY DOCUMENT RELATED HERETO AND SUCH SERVICE SHALL BE DEEMED
COMPLETED THIRTY DAYS AFTER MAILING THEREOF TO SAID AGENT. IT IS UNDERSTOOD THAT
A COPY OF SUCH PROCESS SERVED ON SUCH AGENT WILL BE PROMPTLY FORWARDED BY SUCH
LOCAL AGENT AND BY THE SERVER OF PROCESS BY MAIL TO THE RESPECTIVE GUARANTOR AT
ITS ADDRESS SET FORTH HEREIN, BUT THE FAILURE OF SUCH GUARANTOR TO RECEIVE SUCH
COPY SHALL NOT, TO THE EXTENT PERMITTED BY APPLICABLE LAW, AFFECT IN ANY WAY THE
SERVICE OF SUCH PROCESS. EACH GUARANTOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS IN RESPECT
OF THIS GUARANTY OR ANY DOCUMENT RELATED THERETO. NOTHING HEREIN SHALL AFFECT
THE RIGHT OF THE ADMINISTRATIVE AGENT TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS

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OR OTHERWISE PROCEED AGAINST ANY GUARANTOR IN ANY OTHER JURISDICTION. TO THE
EXTENT THAT ANY GUARANTOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM
JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR
NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR
OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, SUCH GUARANTOR HEREBY
IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW SUCH IMMUNITY IN
RESPECT OF ITS OBLIGATIONS UNDER THIS GUARANTY AND THE OTHER CREDIT DOCUMENTS TO
WHICH IT IS A PARTY.

         (c) TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH GUARANTOR HEREBY
IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR IN CONNECTION WITH THIS GUARANTY OR ANY OTHER
CREDIT DOCUMENT OR ANY MATTER ARISING IN CONNECTION HEREUNDER OR THEREUNDER.
EACH GUARANTOR ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT
CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH OTHER CREDIT
DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR SUCH GUARANTOR ENTERING INTO THE CREDIT DOCUMENTS.

         SECTION 12. SUBORDINATION OF THE BORROWER'S OBLIGATIONS TO THE
GUARANTORS. As an independent covenant, each Guarantor hereby expressly
covenants and agrees for the benefit of the Administrative Agent and other
Guaranteed Parties that all obligations and liabilities of the Borrower to such
Guarantor of whatsoever description including, without limitation, all
intercompany receivables of such Guarantor from the Borrower ("Junior Claims")
shall be subordinate and junior in right of payment to all Obligations of the
Borrower to the Administrative Agent and other Guaranteed Parties under the
terms of the Credit Agreement and the other Credit Documents and the
"Obligations" of the Borrower to the "Administrative Agent" and other
"Guaranteed Parties" under the terms of the Term Loan Agreement and the other
"Credit Documents" (all as defined in the Term Loan Agreement), which are pari
passu ("Senior Claims").

         If an Event of Default shall occur, then, unless and until such Event
of Default shall have been cured, waived, or shall have ceased to exist, no
direct or indirect payment (in cash, property, securities, by setoff or
otherwise) shall be made by the Borrower to any Guarantor on account of or in
any manner in respect of any Junior Claim except such payments and distributions
the proceeds of which shall be applied to the payment of Senior Claims on a pro
rata basis.

         In the event of a Proceeding (as hereinafter defined), all Senior
Claims shall first be paid in full before any direct or indirect payment or
distribution (in cash, property, securities, by setoff or otherwise) shall be
made to any Guarantor on account of or in any manner in respect of any Junior
Claim except such payments and distributions the proceeds of which shall be
applied

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to the payment of Senior Claims. For the purposes of the previous sentence,
"Proceeding" means the Borrower or any Guarantor shall commence a voluntary case
concerning itself under the Bankruptcy Code or any other applicable bankruptcy
laws; or any involuntary case is commenced against the Borrower or any
Guarantor; or a custodian (as defined in the Bankruptcy Code or any other
applicable bankruptcy laws) is appointed for, or takes charge of, all or any
substantial part of the property of the Borrower or any Guarantor, or the
Borrower or any Guarantor commences any other proceedings under any
reorganization arrangement, adjustment of debt, relief of debtor, dissolution,
insolvency or liquidation or similar law of any jurisdiction whether now or
hereafter in effect relating to the Borrower or any Guarantor, or any such
proceeding is commenced against the Borrower or any Guarantor, or the Borrower
or any Guarantor is adjudicated insolvent or bankrupt; or any order of relief or
other order approving any such case or proceeding is entered; or the Borrower or
any Guarantor suffers any appointment of any custodian or the like for it or any
substantial part of its property; or the Borrower or any Guarantor makes a
general assignment for the benefit of creditors; or the Borrower or any
Guarantor shall fail to pay, or shall state that it is unable to pay, or shall
be unable to pay, its debts generally as they become due; or the Borrower or any
Guarantor shall call a meeting of its creditors with a view to arranging a
composition or adjustment of its debts; or the Borrower or any Guarantor shall
by any act or failure to act indicate its consent to, approval of or
acquiescence in any of the foregoing; or any corporate action shall be taken by
the Borrower or any Guarantor for the purpose of effecting any of the foregoing.

          In the event any direct or indirect payment or distribution is made to
 a Guarantor in contravention of this Section 12, such payment or distribution
 shall be deemed received in trust for the benefit of the Administrative Agent
 and other Guaranteed Parties and shall be immediately paid over to the
 Administrative Agent for application against the Guaranteed Obligations in
 accordance with the terms of the Credit Agreement.

          Each Guarantor agrees to execute such additional documents as the
  Administrative Agent may reasonably request to evidence the subordination
  provided for in this Section 12.

          SECTION 13. JUDGMENT CURRENCY. (a) The Guarantors' obligations
  hereunder to make payments in a particular currency (the "Obligation
  Currency") shall not be discharged or satisfied by any tender or recovery
  pursuant to any judgment expressed in or converted into any currency other
  than the Obligation Currency, except to the extent that such tender or
  recovery results in the effective receipt by the Guaranteed Parties of the
  full amount of the Obligation Currency expressed to be payable under this
  Guaranty or the Credit Agreement. If for the purpose of obtaining or enforcing
  judgment against any Guarantor in any court or in any jurisdiction, it becomes
  necessary to convert into or from any currency other than the Obligation
  Currency (such other currency being hereinafter referred to as the "Judgment
  Currency") an amount due in the Obligation Currency, the conversion shall be
  made, at the currency equivalent determined, in each case, as on the Business
  Day immediately preceding the day on which the judgment is given (such
  Business Day being hereafter referred to as the "Judgment Currency Conversion
  Date").

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          (b) If there is a change in the rate of exchange prevailing between
 the Judgment Currency Conversion Date and the date of actual payment of the
 amount due, the Guarantors covenant and agree to pay, or cause to be paid, such
 additional amounts, if any (but in any event not a lesser amount), as may be
 necessary to ensure that the amount paid in the Judgment Currency, when
 converted at the rate of exchange prevailing on the date of payment, will
 produce the amount of the Obligation Currency which could have been purchased
 with the amount of Judgment Currency stipulated in the judgment or judicial
 award at the rate of exchange prevailing on the Judgment Currency Conversion
 Date.

          (c) For purposes of determining the currency equivalent for this
 Section, such amounts shall include any premium and costs payable in connection
 with the purchase of the Obligation Currency.

          SECTION 14. AUTOMATIC ACCELERATION IN CERTAIN EVENTS. Upon the
 occurrence of an Event of Default specified in Section 8.07 of the Credit
 Agreement, all Guaranteed Obligations shall automatically become immediately
 due and payable by the Guarantors, without notice or other action on the part
 of the Administrative Agent or other Guaranteed Parties, and regardless of
 whether payment of the Guaranteed Obligations by the Borrower has then been
 accelerated. In addition, if any event of the types described in Section 8.07
 of the Credit Agreement should occur with respect to any Guarantor, then the
 Guaranteed Obligations shall automatically become immediately due and payable
 by such Guarantor, without notice or other action on the part of the
 Administrative Agent or other Guaranteed Parties, and regardless of whether
 payment of the Guaranteed Obligations by the Borrower has then been
 accelerated.

         SECTION 15. SAVINGS CLAUSE. (a) It is the intent of each Guarantor and
the Guaranteed Parties that each Guarantor's maximum obligations hereunder shall
be, but not in excess of:

                    (i) in a case or proceeding commenced by or against such
           Guarantor under the Bankruptcy Code on or within one year from the
           date on which any of the Guaranteed Obligations are incurred, the
           maximum amount which would not otherwise cause the Guaranteed
           Obligations (or any other obligations of such Guarantor to the
           Guaranteed Parties) to be avoidable or unenforceable against such
           Guarantor under (A) Section 548 of the Bankruptcy Code or (B) any
           state fraudulent transfer or fraudulent conveyance act or statute
           applied in such case or proceeding by virtue of Section 544 of the
           Bankruptcy Code; or

                    (ii) in a case or proceeding commenced by or against such
           Guarantor under the Bankruptcy Code subsequent to one year from the
           date on which any of the Guaranteed Obligations are incurred, the
           maximum amount which would not otherwise cause the Guaranteed
           Obligations (or any other obligations of the Guarantor to the
           Guaranteed Parties) to be avoidable or unenforceable against such
           Guarantor under any state fraudulent transfer or fraudulent
           conveyance act or statute applied in any such case or proceeding by
           virtue of Section 544 of the Bankruptcy Code; or

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<PAGE>

                  (iii) in a case or proceeding commenced by or against such
         Guarantor under any law, statute or regulation other than the
         Bankruptcy Code (including, without limitation, any other bankruptcy,
         reorganization, arrangement, moratorium, readjustment of debt,
         dissolution, liquidation or similar debtor relief laws), the maximum
         amount which would not otherwise cause the Guaranteed Obligations (or
         any other obligations of such Guarantor to the Guaranteed Parties) to
         be avoidable or unenforceable against such Guarantor under such law,
         statute or regulation including, without limitation, any state
         fraudulent transfer or fraudulent conveyance act or statute applied in
         any such case or proceeding.

(The substantive laws under which the possible avoidance or unenforceability of
the Guaranteed Obligations (or any other obligations of such Guarantor to the
Guaranteed Parties) shall be determined in any such case or proceeding shall
hereinafter be referred to as the "Avoidance Provisions").

                  (b) To the end set forth in Section 15(a), but only to the
         extent that the Guaranteed Obligations would otherwise be subject to
         avoidance under the Avoidance Provisions, if such Guarantor is not
         deemed to have received valuable consideration, fair value or
         reasonably equivalent value for the Guaranteed Obligations, or if the
         Guaranteed Obligations would render the Guarantor insolvent, or leave
         the Guarantor with an unreasonably small capital to conduct its
         business, or cause the Guarantor to have incurred debts (or to have
         intended to have incurred debts) beyond its ability to pay such debts
         as they mature, in each case as of the time any of the Guaranteed
         Obligations are deemed to have been incurred under the Avoidance
         Provisions and after giving effect to contribution as among Guarantors,
         the maximum Guaranteed Obligations for which such Guarantor shall be
         liable hereunder shall be reduced to that amount which, after giving
         effect thereto, would not cause the Guaranteed Obligations (or any
         other obligations of such Guarantor to the Guaranteed Parties), as so
         reduced, to be subject to avoidance under the Avoidance Provisions.
         This Section 15(b) is intended solely to preserve the rights of the
         Guaranteed Parties hereunder to the maximum extent that would not cause
         the Guaranteed Obligations of any Guarantor to be subject to avoidance
         under the Avoidance Provisions, and neither such Guarantor nor any
         other Person shall have any right or claim under this Section 15 as
         against the Guaranteed Parties that would not otherwise be available to
         such Person under the Avoidance Provisions.

          (c) None of the provisions of this Section 15 are intended in any
  manner to alter the obligations of any holder of Subordinated Debt or the
  rights of the holders of "senior indebtedness" as provided by the terms of the
  Subordinated Debt. Accordingly, it is the intent of each of the Guarantors
  that in the event that any payment or distribution is made with respect to the
  Subordinated Debt prior to the payment in full of the Guaranteed Obligations
  by virtue of the provisions of this Section 15, in any case or proceeding of
  the kinds described in clauses (i)-(iii) of Section 15(a), the holders of the
  Subordinated Debt shall be obligated to pay or deliver such payment or
  distribution to or for the benefit of the Guaranteed Parties. Furthermore, in
  respect of the Avoidance Provisions, it is the intent of each Guarantor that
  the subrogation rights of the

                                                              Guaranty Agreement
<PAGE>

holders of Subordinated Debt with respect to the obligations of the Guarantor
under this Guaranty, be subject in all respects to the provisions of Section
15(b).

          SECTION 16. INFORMATION. Each of the Guarantors assumes all
 responsibility for being and keeping itself informed of the Borrower's
 financial condition and assets, and of all other circumstances bearing upon the
 risk of nonpayment of the Guaranteed Obligations and the nature, scope and
 extent of the risks that such Guarantor assumes and incurs hereunder, and
 agrees that none of the Guaranteed Parties will have any duty to advise any of
 the Guarantors of information known to it or any of them regarding such
 circumstances or risks.

          SECTION 17. REPRESENTATIONS AND WARRANTIES. Each Guarantor represents
 and warrants as to itself that all representations and warranties relating to
 it contained in Sections 5.01 through 5.06 of the Credit Agreement are true and
 correct.

          SECTION 18. Survival OF AGREEMENT. All agreements, representations and
 warranties made herein shall survive the execution and delivery of this
 Guaranty and the Credit Agreement, the making of the Loans and the execution
 and delivery of the Notes and the other Credit Documents.

          SECTION 19. COUNTERPARTS. This Guaranty and any amendments, waivers,
 consents or supplements hereto may be executed in any number of counterparts
 and by different parties hereto in separate counterparts, each of which when so
 executed and delivered shall be deemed an original, but all such counterparts
 together shall constitute but one and the same instrument.

           SECTION 20. CURRENCY OF PAYMENT. All payments to be made by the
  Guarantors hereunder shall be made in the relevant currency or currencies in
  which the Guaranteed Obligations are denominated in immediately available
  funds. If any Guarantor is unable for any reason to effect payment of any of
  the Guaranteed Obligations in the currency in which such Guaranteed
  Obligations are denominated, the Guaranteed Parties may, at their option,
  require such payment to be made in the Dollar Equivalent of such currency. If
  in any case where any of the Guarantors shall make any such payment in the
  Dollar Equivalent, the Guarantors agree to hold the Guaranteed Parties
  harmless from any loss incurred by the Lenders arising from any change in the
  value of Dollars in relation to such currency between the date such payment
  became due and the date of payment thereof.

           SECTION 21. ADDITIONAL GUARANTORS. Upon execution and delivery by any
  Subsidiary of the Borrower of an instrument in the form of Annex 1, such
  Subsidiary of the Borrower shall become a Guarantor hereunder with the same
  force and effect as if originally named a Guarantor herein (each an
  "Additional Guarantor"). The execution and delivery of any such instrument
  shall not require the consent of any Guarantor hereunder. The rights and
  obligations of each Guarantor hereunder shall remain in full force and effect
  notwithstanding the addition of any Additional Guarantor as a party to this
  Guaranty.

                                                              Guaranty Agreement
<PAGE>

         SECTION 22. Application of Proceeds. All cash proceeds received by the
 Administrative Agent from the Guarantors shall be applied by the Administrative
Agent to payment of the Guaranteed Obligations in the following order unless a
court of competent jurisdiction shall otherwise direct:

                  FIRST, to payment of all reasonable costs and expenses of the
          Administrative Agent incurred in connection with the collection and
          enforcement of the Guaranteed Obligations;

                  SECOND, to payment of that portion of the Guaranteed
          Obligations constituting accrued and unpaid interest and fees, pro
          rata among the Guaranteed Parties in accordance with the amount of
          such accrued and unpaid interest and fees owing to each of them;

                  THIRD, to payment of the principal of the Guaranteed
          Obligations, pro rata among the Guaranteed Parties in accordance with
          the amount of such principal owing to each of them;

                  FOURTH, to payment of any other Guaranteed Obligations (other
          than those listed above) pro rata among the Guaranteed Parties in
          accordance with the amounts owing to each of them; and

                  FIFTH, the balance, if any, after all of the Guaranteed
          Obligations have been satisfied, to the applicable Guarantor or to
          whosoever may be lawfully entitled to receive them; provided, that
          prior to the date on which all Guaranteed Obligations have been paid
          in full and all commitments to make loans, issue letters of credit or
          otherwise extend credit pursuant to the Credit Agreement have been
          terminated, such balance may, in the discretion of the Administrative
          Agent, be held by the Administrative Agent as collateral to be applied
          at any time thereafter pursuant to this Section 22.

                        [Signatures Follow on Next Page]

                                                              Guaranty Agreement
<PAGE>

         IN WITNESS WHEREOF, each Guarantor and the Administrative Agent have
caused this Guaranty to be duly executed and delivered by their respective duly
authorized officers as of the date first above written.

Address for Notices:                         ALEXANDER CITY CASTING COMPANY,
-------------------                          INC.("Guarantor")

c/o Intermet Corporation
5445 Corporate Drive
Suite 200                                    By:   /s/  Alan J. Miller
Troy, Michigan 48098                               Name Printed: Alan J. Miller
                                                   Title: Secretary

Attn: Doretha J. Christoph

Address for Notices:                         CAST-MATIC CORPORATION
-------------------                          (a "Guarantor")

c/o Intermet Corporation
5445 Corporate Drive
Suite 200                                    By:   /s/ Alan J. Miller
Troy, Michigan 48098                               Name Printed: Alan J. Miller
                                                   Title: Secretary

Attn: Doretha J. Christoph

Address for Notices:                         COLUMBUS FOUNDRY, L.P.
-------------------                          (a "Guarantor")

c/o Intermet Corporation
5445 Corporate Drive
Suite 200                                    By:  /s/ Alan J. Miller
Troy, Michigan 48098                              Name Printed: Alan J. Miller
                                                  Title: Secretary

Attn: Doretha J. Christoph

                                                              Guaranty Agreement

<PAGE>

Address for Notices:                        DIVERSIFIED DIEMAKERS, INC.
-------------------                         (a "Guarantor")
c/o Intermet Corporation
5445 Corporate Drive
Suite 200
Troy, Michigan 48098                        By:  /s/ Alan J. Miller
                                                 Name Printed: Alan J. Miller
                                                 Title: Secretary
Attn: Doretha J. Christoph

Address for Notices:                        FRISBY P.M.C., INCORPORATED
-------------------                         (a "Guarantor")

c/o Intermet Corporation
5445 Corporate Drive
Suite 200                                   By:  /s/ Alan J. Miller
Troy, Michigan 48098                             Name Printed: Alan  J. Miller
                                                 Title: Secretary

Attn: Doretha J. Christoph

Address for Notices:                        GANTON TECHNOLOGIES INC.
-------------------                         (a "Guarantor")
c/o Intermet Corporation
5445 Corporate Drive
Suite 200                                   By:  /s/ Alan J. Miller
Troy, Michigan 48098                             Name Printed: Alan  J. Miller
                                                 Title: Secretary

Attn: Doretha J. Christoph

                                                              Guaranty Agreement

<PAGE>

Address for Notices:                        INTERMET HOLDING COMPANY
-------------------                         (a "Guarantor")

c/o Intermet Corporation
5445 Corporate Drive
Suite 200                                   By:  /s/ Alan J. Miller
Troy, Michigan 48098                             Name Printed: Alan J. Miller
                                                 Title:  Secretary

Attn: Doretha J. Christoph

Address for Notices:                        INTERMET INTERNATIONAL, INC.
-------------------                         (a "Guarantor")

c/o Intermet Corporation
5445 Corporate Drive
Suite 200                                   By:  /s/ Alan J. Miller
Troy, Michigan 48098                             Name Printed: Alan J. Miller
                                                 Title:  Secretary

Attn: Doretha J. Christoph

Address for Notices:                        IRONTON IRON INC.
-------------------                         (a "Guarantor")

c/o Intermet Corporation
5445 Corporate Drive
Suite 200                                   By:  /s/ Alan J. Miller
Troy, Michigan 48098                             Name Printed: Alan J. Miller
                                                 Title:  Secretary

Attn: Doretha J. Christoph

                                                              Guaranty Agreement

<PAGE>

Address for Notices:                        LYNCHBURG FOUNDRY COMPANY
-------------------                         (a "Guarantor")

c/o Intermet Corporation
5445 Corporate Drive
Suite 200                                   By:  /s/ Alan J. Miller
Troy, Michigan 48098                             Name Printed: Alan J. Miller
                                                 Title:  Secretary

Attn: Doretha J. Christoph

Address for Notices:                        NORTHERN CASTINGS CORPORATION
-------------------                         (a "Guarantor")

c/o Intermet Corporation
5445 Corporate Drive
Suite 200                                   By:  /s/ Alan J. Miller
Troy, Michigan 48098                             Name Printed: Alan J. Miller
                                                 Title:  Secretary

Attn: Doretha J. Christoph

Address for Notices:                        SUDBURY, INC.
-------------------                         (a "Guarantor")

c/o Intermet Corporation
5445 Corporate Drive
Suite 200                                   By:  /s/ Alan J. Miller
Troy, Michigan 48098                             Name Printed: Alan J. Miller
                                                 Title:  Secretary

Attn: Doretha J. Christoph

                                                              Guaranty Agreement

<PAGE>

Address for Notices:                        SUDM, INC.
-------------------                         (a "Guarantor")

c/o Intermet Corporation
5445 Corporate Drive
Suite 200                                   By:  /s/ Alan J. Miller
Troy, Michigan 48098                             Name Printed: Alan J. Miller
                                                 Title:  Secretary

Attn: Doretha J. Christoph

Address for Notices:                        TOOL PRODUCTS, INC.
-------------------                         (a "Guarantor")

c/o Internet Corporation
5445 Corporate Drive
Suite 200                                   By:  /s/ Alan J. Miller
Troy, Michigan 48098                             Name Printed: Alan J. Miller
                                                 Title:  Secretary

Attn: Doretha J. Christoph

Address for Notices:                        WAGNER CASTINGS COMPANY
-------------------                         (a "Guarantor")

c/o Intermet Corporation
5445 Corporate Drive
Suite 200                                    By:  /s/ Alan J. Miller
Troy, Michigan 48098                              Name Printed: Alan J. Miller
                                                  Title:  Secretary

Attn: Doretha J. Christoph

                                                              Guaranty Agreement

<PAGE>

Address for Notices:                        WAGNER HAVANA, INC.
-------------------                         (a "Guarantor")

c/o Internet Corporation
5445 Corporate Drive
Suite 200                                   By:  /s/ Alan J. Miller
Troy, Michigan 48098                             Name Printed: Alan J. Miller
                                                 Title:  Secretary

Attn:  Doretha J. Christoph

                                                              Guaranty Agreement

<PAGE>

                                           THE BANK OF NOVA SCOTIA, as
                                           Administrative Agent

                                            By:  /s/  F.C.H. Ashby
                                               ---------------------------------
                                               Name Printed:  F.C.H. Ashby
                                                             -------------------
                                              Title:          Senior Manager
                                                     ---------------------------
                                                              Loan Operations

SECTION 12 OF THE
FOREGOING GUARANTY
IS HEREBY ACKNOWLEDGED
AND AGREED TO:

INTERMET CORPORATION

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

                                                              Guaranty Agreement

<PAGE>

                                         THE BANK OF NOVA SCOTIA, AS
                                         Administrative Agent

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

SECTION 12 OF THE
FOREGOING GUARANTY
IS HEREBY ACKNOWLEDGED
AND AGREED TO:

INTERMET CORPORATION

By:  /s/ Alan J. Miller
     ------------------
Name Printed: Alan J. Miller
              ---------------------
Title: Vice President and Secretary
       ----------------------------

                                                              Guaranty Agreement

<PAGE>
                                                                        ANNEX 1

                                     FORM OF
                                   SUPPLEMENT
                              TO GUARANTY AGREEMENT

         THIS SUPPLEMENT TO GUARANTY AGREEMENT (this "Supplement to Guaranty
Agreement"), dated as of_______, _________, made by_________________________ , a
_______________________corporation (the "Additional Guarantor"), in favor of
THE BANK OF NOVA SCOTIA, a Canadian chartered bank acting through its Atlanta
Agency (in such capacity, the "Administrative Agent"), in its capacity as
administrative agent for the banks and other lending institutions parties to the
Credit Agreement (as hereinafter defined) and each assignee thereof becoming a
"Lender" as provided therein (the "Lenders"; the Lenders and the Administrative
Agent and their respective Affiliates, being collectively referred to herein as
the "Guaranteed Parties").

                              W I T N E S S E T H :

          WHEREAS, Intermet Corporation (the "Borrower"), the Lenders, the
 Administrative Agent, Bank One, Michigan, as Syndication Agent, (the
 "Syndication Agent") and SunTrust Bank, as Documentation Agent (the
 "Documentation Agent") are parties to that certain Five-Year Credit Agreement,
 dated as of November 5, 1999, as amended (as the same may hereafter be amended,
 restated, supplemented or otherwise modified from time to time, the "Credit
 Agreement") pursuant to which the Lenders have made commitments to make loans
 to the Borrower:

          WHEREAS, certain Subsidiaries (the "Subsidiary Guarantors") of the
 Borrower have executed and delivered that certain First Amended and Restated
 Guaranty Agreement dated as of July 17, 2001 (the "Subsidiary Guaranty")
 pursuant to which the Subsidiary Guarantors have agreed to guarantee all of the
 obligations of the Borrower and its Subsidiaries under the Credit Agreement and
 the other Credit Documents (as defined in the Credit Agreement);

          WHEREAS, the Borrower, the Subsidiary Guarantors and the Additional
  Guarantor share an identity of interests as members of a consolidated group of
  companies engaged in substantially similar businesses; the Borrower provides
  certain centralized financial, accounting and/or management services to the
  Additional Guarantor; and the making of the loans has enhanced and will
  enhance the overall financial strength and stability of the Borrower's
  corporate group, including the Additional Guarantor;

                                                              Guaranty Agreement
<PAGE>

         WHEREAS, it is a condition subsequent to the Lenders' obligation to
make loans to the Borrower under the Credit Agreement that the Additional
Guarantor execute and deliver to the Administrative Agent this Supplement to
Guaranty Agreement, and the Additional Guarantor desires to execute and deliver
this Supplement to Guaranty Agreement to satisfy such condition subsequent;

         NOW, THEREFORE, in consideration of the premises and in order to induce
 the Guaranteed Parties to enter into and perform their obligations under the
 Credit Agreement, the Additional Guarantor hereby agrees as follows:

 1.      DEFINED TERMS. Capitalized terms not otherwise defined herein are used
herein with the meanings specified for such terms in the Credit Agreement.

 2 .     ADDITIONAL GUARANTOR. The Additional Guarantor agrees that it shall be
and become a Guarantor for all purposes of the Subsidiary Guaranty and shall be
fully liable thereunder to the Administrative Agent and other Guaranteed Parties
to the same extent and with the same effect as though the Additional Guarantor
had been one of the Guarantors originally executing and delivering the
Subsidiary Guaranty. Without limiting the foregoing, the Additional Guarantor
hereby jointly and severally (with respect to the guaranties made by the
Subsidiary Guarantors under the Subsidiary Guaranty), irrevocably and
unconditionally, guarantees punctual payment when due, whether at stated
maturity by acceleration or otherwise, of all Loans and all other Obligations
(as defined in the Credit Agreement), owing by the Borrower and its Subsidiaries
to the Lenders or the Administrative Agent or their respective Affiliates, or
any of them, under the Credit Agreement, the Notes and the other Credit
Documents including, without limitation, all renewals, extensions, modifications
and refinancings thereof, now or hereafter owing, whether for principal,
interest, fees, expenses or otherwise, and any and all reasonable out-of-pocket
expenses (including reasonable attorneys' fees actually incurred) and expenses
incurred by the Administrative Agent in enforcing any rights under the
Subsidiary Guaranty (as supplemented hereby), subject, however, to the
limitations expressly provided in the Subsidiary Guaranty in Section 15 thereof.
All references in the Subsidiary Guaranty to "Guarantors" or any "Guarantor"
shall be deemed to include and to refer to the Additional Guarantor.

3.       GOVERNING LAW; APPOINTMENT OF AGENT FOR SERVICE OF PROCESS; SUBMISSION
         TO JURISDICTION; WAIVER OF JURY TRIAL.

         (a)      THIS SUPPLEMENT TO GUARANTY AGREEMENT WILL BE DEEMED TO
BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW
YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK).

         (b)       ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
SUPPLEMENT TO GUARANTY AGREEMENT RELATED HERETO MAY BE BROUGHT IN THE COURTS
OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN
DISTRICT OF NEW YORK, AND, BY EXECUTION

                                                              Guaranty Agreement

<PAGE>

AND DELIVERY OF THIS SUPPLEMENT TO GUARANTY AGREEMENT, THE ADDITIONAL GUARANTOR
HEREBY CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE JURISDICTION
OF THE AFORESAID COURTS SOLELY FOR THE PURPOSE OF ADJUDICATING ITS RIGHTS OR THE
RIGHTS OF THE ADMINISTRATIVE AGENT AND OTHER GUARANTEED PARTIES WITH RESPECT TO
THIS SUPPLEMENT TO GUARANTY AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE
ADDITIONAL GUARANTOR HEREBY IRREVOCABLY DESIGNATES UNITED STATES CORPORATION
COMPANY AS THE DESIGNEE, APPOINTEE AND AGENT OF THE ADDITIONAL GUARANTOR TO
RECEIVE, FOR AND ON BEHALF OF THE ADDITIONAL GUARANTOR, SERVICE OF PROCESS IN
SUCH JURISDICTION IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
SUPPLEMENT TO GUARANTY AGREEMENT OR ANY DOCUMENT RELATED HERETO AND SUCH SERVICE
SHALL BE DEEMED COMPLETED THIRTY (30) DAYS AFTER MAILING THEREOF TO SAID AGENT.
IT IS UNDERSTOOD THAT A COPY OF SUCH PROCESS SERVED ON SUCH AGENT WILL BE
PROMPTLY FORWARDED BY SUCH LOCAL AGENT AND BY THE SERVER OF PROCESS BY MAIL TO
THE ADDITIONAL GUARANTOR AT ITS ADDRESS SET FORTH HEREIN, BUT THE FAILURE OF THE
ADDITIONAL GUARANTOR TO RECEIVE SUCH COPY SHALL NOT, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, AFFECT IN ANY WAY THE SERVICE OF SUCH PROCESS. THE ADDITIONAL
GUARANTOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT
LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY
ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS IN RESPECT OF THIS
SUPPLEMENT TO GUARANTY AGREEMENT OR ANY DOCUMENT RELATED THERETO. NOTHING HEREIN
SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED
AGAINST THE ADDITIONAL GUARANTOR IN ANY OTHER JURISDICTION. TO THE EXTENT THAT
THE ADDITIONAL GUARANTOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM
JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR
NOTICE, ATTACHMENT PRIOR TO JUDGMENT. ATTACHMENT IN AID OF EXECUTION OR
OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE ADDITIONAL GUARANTOR
HEREBY IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW SUCH IMMUNITY
IN RESPECT OF ITS OBLIGATIONS UNDER THIS SUPPLEMENT TO GUARANTY AGREEMENT AND
THE OTHER CREDIT DOCUMENTS TO WHICH IT IS A PARTY.

         (c)      TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE ADDITIONAL
GUARANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN CONNECTION WITH THIS SUPPLEMENT
TO GUARANTY AGREEMENT OR ANY OTHER CREDIT DOCUMENT OR ANY MATTER ARISING IN
CONNECTION

                                                              Guaranty Agreement

<PAGE>

HEREUNDER OR THEREUNDER. THE ADDITIONAL GUARANTOR ACKNOWLEDGES AND AGREES THAT
IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH
OTHER PROVISION OF EACH OTHER CREDIT DOCUMENT TO WHICH IT IS A PARTY) AND THAT
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE GUARANTEED PARTIES ENTERING INTO
THE CREDIT DOCUMENTS.

         IN WITNESS WHEREOF, the Additional Guarantor has caused this Supplement
to Guaranty to be duly executed and delivered under seal by its duly authorized
officers as of the date first above written.

Address for Notices:                                     ADDITIONAL GUARANTOR:
--------------------                                     ---------------------

                                                          By:
                                                          Title:

                                                              Guaranty Agreement<PAGE>

                                                                  EXHIBIT 4.1(c)

                      SUBSIDIARY PLEDGE AND SECURITY AGREEMENT

         This SUBSIDIARY PLEDGE AND SECURITY AGREEMENT (as amended,
supplemented, amended and restated or otherwise modified from time to time, this
"Security Agreement"), dated as of July 17, 2001, is made by ALEXANDER CITY
CASTING COMPANY, INC., a corporation organized and existing under the laws of
the State of Alabama, CAST-MATIC CORPORATION, a corporation organized and
existing under the laws of the State of Michigan, COLUMBUS FOUNDRY, L.P., a
limited partnership organized and existing under the laws of the State of
Delaware, DIVERSIFIED DIEMAKERS, INC, a corporation organized and existing under
the laws of the State of Delaware, GANTON TECHNOLOGIES INC., a corporation
organized and existing under the laws of the State of Illinois, FRISBY P.M.C.,
INCORPORATED, a corporation organized and existing under the laws of the State
of Illinois, INTERMET HOLDING COMPANY, a corporation organized and existing
under the laws of the State of Delaware, INTERMET INTERNATIONAL, INC., a
corporation organized and existing under the laws of the State of Georgia,
IRONTON IRON INC., a corporation organized and existing under the laws of the
State of Ohio, LYNCHBURG FOUNDRY COMPANY, a corporation organized and existing
under the laws of the Commonwealth of Virginia, NORTHERN CASTINGS CORPORATION, a
corporation organized and existing under the laws of the State of Georgia,
SUDBURY, INC., a corporation organized and existing under the laws of the State
of Delaware, SUDM, INC., a corporation organized and existing under the laws of
the State of Michigan, TOOL PRODUCTS, INC., a corporation organized and existing
under the laws of the State of Delaware, WAGNER CASTINGS COMPANY, a corporation
organized and existing under the laws of the State of Delaware and WAGNER
HAVANA, INC., a corporation organized and existing under the laws of the State
of Delaware, and each other Subsidiary of INTERMET CORPORATION, a Georgia
corporation (the "Borrower"), that executes and delivers a supplement to this
Security Agreement from time to time (each individually, a "Grantor" and,
collectively, the "Grantors"), in favor of THE BANK OF NOVA SCOTIA ("Scotia
Capital"), as collateral agent under the Term Loan Agreement and the Revolving
Credit Agreement (together with its successor(s) thereto in such capacities, the
"Collateral Agent") for the benefit of each of the Secured Parties (capitalized
terms used herein have the meanings set forth in or incorporated by reference in
Article I).

                               W I T N E S S E T H

         WHEREAS, pursuant to the First Amended and Restated Term Loan
Agreement, dated as the date hereof (as amended, supplemented, amended and
restated or otherwise modified from time to time, the "Term Loan Agreement"),
among the Borrower, the "Lenders" thereunder, SunTrust Bank, as the
Documentation Agent, Bank One, Michigan, as the Syndication Agent and Scotia
Capital, as administrative and collateral agent, such Lenders and the Borrower
have

                                                   Subsidiary Security Agreement

<PAGE>

agreed to refinance a portion of the outstanding term loans made by such Lenders
to the Borrower;

         WHEREAS, the Grantors have guaranteed the obligations of the Borrower
under the Term Loan Agreement pursuant to a First Amended and Restated Guaranty
Agreement dated as of the date hereof (the "Term Loan Guaranty Agreement");

         WHEREAS, pursuant to the Fourth Amendment dated as of the date hereof
(the "Revolving Credit Amendment") to the Five-Year Credit Agreement dated as of
November 5, 1999, as amended (as amended, supplemented, amended and restated or
otherwise modified from time to time, the "Revolving Credit Agreement"), among
the Borrower, the "Lenders" thereunder, Scotia Capital, as administrative and
collateral agent, and the other agents thereunder, such Lenders and the Borrower
have agreed to refinance the outstanding revolving loans, swingline loans,
letters of credit and available credit thereunder extended by such Lenders to
the Borrower:

         WHEREAS, the Grantors have guaranteed the obligations of the Borrower
under the Revolving Credit Agreement pursuant to a First Amended and Restated
Guaranty Agreement dated as of the date hereof (the "Revolving Credit Guaranty
Agreement"); and

         WHEREAS, as a condition precedent to the effectiveness of the Term Loan
Agreement and the Revolving Credit Amendment, each Grantor is required to
execute and deliver this Security Agreement;

         NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in order to induce the Secured
Parties to engage in such refinancings, each Grantor agrees, for the benefit of
the Secured Parties as follow:

                                    ARTICLE I
                                   DEFINITIONS

         SECTION 1.1. Certain Terms. The following terms (whether or not
underscored) when used in this Security Agreement, including its preamble and
recitals, shall have the following meanings (such definitions to be equally
applicable to the singular and plural forms thereof):

         "Borrower" is defined in the preamble.

         "Capital Securities" means with respect to any Person, all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's capital, whether now outstanding or
issued after the date hereof.

         "Collateral" is defined in Section 2.1.

         "Collateral Account" is defined in clause (c) of Section 4.3.

                                       2           Subsidiary Security Agreement

<PAGE>

         "Collateral Agent" is defined in the preamble.

         "Computer, Hardware and Software Collateral" means:

                  (a) all computer and other electronic data processing
         hardware, integrated computer systems, central processing units, memory
         units, display terminals, printers, features, computer elements, card
         readers, tape drives, hard and soft disk drives, cables, electrical
         supply hardware, generators, power equalizers, accessories and all
         peripheral devices and other related computer hardware;

                  (b) all software programs (including both source code, object
         code and all related applications and data tiles), whether now owned,
         licensed or leased or hereafter acquired by any Grantor, designed for
         use on the computers and electronic data processing hardware described
         in clause (a) above;

                  (c) all firmware associated therewith,

                  (d) all documentation (including flow charts, logic diagrams,
         manuals, guides and specifications) with respect to such hardware,
         software and firmware described in the preceding clauses (a) through
         (c); and

                  (e) all rights with respect to all of the foregoing,
         including any and all copyrights, licenses, options, warranties,
         service contracts, program services, test rights, maintenance rights,
         support rights, improvement rights, renewal rights and indemnifications
         and any substitutions, replacements, additions or model conversions of
         any of the foregoing.

         "Copyright Collateral" means all copyrights of each Grantor, whether
statutory or common law, registered or unregistered and whether published or
unpublished, now or hereafter in force throughout the world including all of
such Grantor's right, title and interest in and to all copyrights registered in
the United States Copyright Office or anywhere else in the world and also
including the copyrights referred to in Item A of Schedule V hereto, and
registrations and recordings thereof and all applications for registration
thereof, whether pending or in preparation, all copyright licenses, including
each copyright license referred to in Item B of Schedule V hereto, the right to
sue for past, present and future infringements of any of the foregoing, all
rights corresponding thereto, all extensions and renewals of any thereof and all
proceeds of the foregoing, including licenses, royalties, income, payments,
claims, damages and proceeds of suit.

         "Credit Document" means any "Credit Document" as defined in either the
Term Loan Agreement or the Revolving Credit Agreement.

         "Credit Part" means any of the Borrower and the Grantors.

                                       3          Subsidiary Security Agreement

<PAGE>

         "Default" means any condition or event which, with notice or lapse of
time or both, would constitute an Event of Default.

         "Distributions" means all non-cash dividends paid on Capital
Securities, liquidating dividends paid on Capital Securities, shares of Capital
Securities resulting from (or in connection with the exercise of) stock splits,
reclassifications, warrants, options, non-cash dividends, mergers,
consolidations, and all other distributions (whether similar or dissimilar to
the foregoing) on or with respect to any Capital Securities constituting
Collateral, but excluding Dividends.

         "Dividends" means cash dividends and cash distributions with respect to
any Capital Securities constituting Collateral that are not a liquidating
dividend.

         "Equipment" is defined in clause (c) of Section 2.1.

         "Event of Default" means any Event of Default as defined in either the
Term Loan Agreement or the Revolving Credit Agreement.

         "Foreign Pledge Agreement" means any supplemental pledge agreement
governed by the laws of a jurisdiction other than the United States or a state
thereof executed and delivered by any Consolidated Company pursuant to the terms
of this Agreement, in form and substance satisfactory to the Collateral Agent,
as may be necessary or desirable under the laws of organization or incorporation
of a Subsidiary thereof to further protect or perfect the Lien on and security
interest in any Collateral.

         "Grantor" and "Grantors" are defined in the preamble.

         "Including" means including, without limitation.

         "Intellectual Property Collateral" means, collectively, the Computer
Hardware and Software Collateral, the Copyright Collateral, the Patent
Collateral, the Trademark Collateral and the Trade Secrets Collateral.

         "Intercompany Note" means a promissory note payable to any
Grantor, substantially in the form of Exhibit A hereto (with such modifications
as agreed to by the Collateral Agent), as amended, modified or supplemented from
time to time in accordance with clause (c) of Section 4.6, together with any
notes delivered in extension or renewal thereof or substitution therefor.

         "Inventory" is defined in clause (d) of Section 2.1.

         "Lien" means any mortgage, deed of trust, pledge, security interest,
    lien, charge, hypothecation, assignment, deposit arrangement, title
    retention, preferential property right, trust or other arrangement having
    the practical effect of the foregoing and shall include the interest of

                                       4           Subsidiary Security Agreement

<PAGE>

a vendor or lessor under any conditional sale agreement, capitalized lease or
other title retention agreement.

         "Patent Collateral" means:

                  (a) all letters patent and applications for letters patent
         throughout the world, including all patent applications in preparation
         for filing and each patent and patent application referred to in Item A
         of Schedule III hereto;

                  (b) all reissues, divisions, continuations,
         continuations-in-part, extensions, renewals and reexaminations of any
         of the items described in clause (a);

                  (c) all patent licenses, including each patent license
         referred to in Item B of Schedule III hereto; and

                  (d) all proceeds of, and rights associated with, the foregoing
         (including license royalties and proceeds of infringement suits), the
         right to sue third parties for past, present or future infringements of
         any patent or patent application, and for breach or enforcement of any
         patent license.

         "Receivables" is defined in clause (e) of Section 2.1.

         "Related Contracts" is defined in clause (e) of Section 2.1.

         "Required Lenders" means both the "Required Lenders" as defined in the
Term Loan Agreement and the "Required Lenders" as defined in the Revolving
Credit Agreement.

         "Revolving Credit Agreement" is defined in the third recital.

         "Revolving Credit Amendment" is defined in the third recital.

         "Revolving Credit Guaranty Agreement" is defined in the fourth recital.

         "Secured Obligations" means:

                  (a) all "Guaranteed Obligations" (as defined in the Term Loan
         Guaranty Agreement);

                  (b) all "Guaranteed Obligations" (as defined in the Revolving
         Credit Guaranty Agreement); and

                  (c) all Cash Management Obligations.

                                       5           Subsidiary Security Agreement

<PAGE>

         "Secured Party" means any of the Collateral Agent and each of the
agents, "Lenders" and their respective Affiliates under the Term Loan Agreement
or the Revolving Credit Agreement

         "Securities Act" is defined in clause (a) of Section 6.2.

         "Security Agreement" is defined in the preamble.

         "Securities Control Agreement" means an agreement in form and substance
satisfactory to the Collateral Agent which provides for the Collateral Agent to
have "control" (as defined in Section 8-106 of the UCC, as such term relates to
investment property (other than certificated securities or commodity contracts),
or as used in Section 9-115(1)(e) of the UCC, as such term relates to commodity
contracts).

         "Specified Event" means the occurrence and continuance of a Default
under Section 8.07 of the Term Loan Agreement or the Revolving Credit Agreement
or any other "Event of Default".

         "Term Loan Agreement" is defined in the first recital.

         "Term Loan Guaranty Agreement" is defined in the second recital.

          "Termination Date" means the date on which all Secured Obligations
 have been paid in full and all commitments to make loans, issue letters of
 credit or otherwise extend credit pursuant to Term Loan Agreement and the
 Revolving Credit Agreement have been terminated.

          "Trademark Collateral" means:

                   (a) (i) all trademarks, trade names, corporate names, company
         names, business names, fictitious business names, trade styles, service
         marks, certification marks, collective marks, logos and other source or
         business identifiers, and all goodwill of the business associated
         therewith, now existing or hereafter adopted or acquired including
         those referred to in Item A of Schedule IV hereto, whether currently in
         use or not, all registrations and recordings thereof and all
         applications in connection therewith, whether pending or in preparation
         for filing, including registrations, recordings and applications in the
         United States Patent and Trademark Office or in any office or agency of
         the United States of America or any State thereof or any other country
         or political subdivision thereof or otherwise, and all common-law
         rights relating to the foregoing, and (ii) the right to obtain all
         reissues, extensions or renewals of the foregoing (collectively
         referred to as the "Trademark");

                  (b) all Trademark licenses for the grant by or to any Grantor
         of any right to use any Trademark, including each Trademark license
         referred to in Item B of Schedule IV hereto; and

                                       6           Subsidiary Security Agreement

<PAGE>

                  (c) all proceeds of, and rights associated with, the
         foregoing, including any claim by any Grantor against third parties for
         past, present or future infringement or dilution of any Trademark,
         Trademark registration or Trademark license.

         "Trade Secrets Collateral" means all common law and statutory trade
secrets and all other confidential, proprietary or useful information and all
know-how obtained by or used in or contemplated at any time for use in the
business of any Grantor (all of the foregoing being collectively called a "Trade
Secret"), whether or not such Trade Secret has been reduced to a writing or
other tangible form, including all documents and things embodying, incorporating
or referring in any way to such Trade Secret, all Trade Secret licenses,
including each Trade Secret license referred to in Schedule VI hereto, and
including the right to sue for and to enjoin and to collect damages for the
actual or threatened misappropriation of any Trade Secret and for the breach or
enforcement of any such Trade Secret license.

         "UCC" means the Uniform Commercial Code as in effect in the State of
New York, except to the extent that the validity or the perfection of the
security interest hereunder, or remedies hereunder, in respect of any particular
Collateral are governed by the laws of a jurisdiction other than the State of
New York, in which case "UCC" means the Uniform Commercial Code as in effect in
such jurisdiction.

         SECTION 1.2. Revolving Credit Agreement Definitions. Unless otherwise
defined herein or the context otherwise requires, terms used in this Security
Agreement, including its preamble and recitals, have the meanings provided in
the Revolving Credit Agreement.

         SECTION 1.3. UCC Definitions. Unless otherwise defined herein or in the
Revolving Credit Agreement or the context otherwise requires, terms for which
meanings are provided in the UCC, as the same shall be hereafter amended,
including amendments to such terms as may occur upon enactment and effective
date of Revised Article 9, are used in this Security Agreement, including its
preamble and recitals, with such meanings.

                                   ARTICLE II
                                SECURITY INTEREST

          SECTION 2.1. Grant of Security Interest. Each Grantor hereby assigns,
 pledges, hypothecates, charges, mortgages, delivers, and transfers to the
 Collateral Agent, for its benefit and the ratable benefit of each other Secured
 Party, and hereby grants to the Collateral Agent, for its benefit and the
 ratable benefit of each other Secured Party, a continuing security interest in
 all of the following property, whether now or hereafter existing or acquired by
 such Grantor (the "Collateral"):

                  (a) all Intercompany Notes in which such Grantor has an
         interest (including each Intercompany Note described in Item A of
         Schedule I hereto (including the right to receive payment of the
         principal of and accrued interest on such Intercompany Note, and

                                        7          Subsidiary Security Agreement

<PAGE>

         other rights of such Grantor arising in its capacity as the payee of
         such Intercompany Note));

                  (b) (i) all investment property in which such Grantor has an
         interest (including the Capital Securities of each issuer of such
         Capital Securities described in Item of Schedule I hereto) and (ii) all
         other Capital Securities which are interests in limited liability
         companies or partnerships in which such Grantor has an interest
         (including the Capital Securities of each issuer of such Capital
         Securities described in Item B of Schedule I hereto), in each case
         together with Dividends and Distributions payable in respect of the
         Collateral described in the foregoing clauses (b)(i) and (b)(ii);

                  (c) all equipment of such Grantor, including all parts thereof
         and all accessions, additions, attachments, improvements, substitutions
         and replacements thereto and therefor and all accessories related
         thereto (collectively referred to as the "Equipment");

                  (d) all inventory in all of its forms of such Grantor,
         including (i) all raw materials and work in process therefor, finished
         goods thereof, and materials used or consumed in the manufacture or
         production thereof, (ii) all goods in which such Grantor has an
         interest in mass or a joint or other interest or right of any kind
         (including goods in which such Grantor has an interest or right as
         consignee), and (iii) all goods which are returned to or repossessed by
         such Grantor, and all accessions thereto, products thereof and
         documents therefor (all of the foregoing collectively referred to as
         the "Inventory");

                  (e) all accounts, contracts, chattel paper, documents,
         instruments, and general intangibles (including tax refunds) of such
         Grantor, whether or not arising out of or in connection with the sale
         or lease of goods or the rendering of services, and all rights of such
         Grantor now or hereafter existing in and to all security agreements,
         guaranties, leases and other contracts securing or otherwise relating
         to any such accounts, contracts, chattel paper, documents, instruments,
         and general intangibles (all of the foregoing collectively referred to
         as the "Receivables", and any and all such security agreements,
         guaranties, leases and other contracts collectively referred to as the
         "Related Contracts");

                  (f) all Intellectual Property Collateral of such Grantor;

                  (g) the Collateral Account and each lock box (including all
         deposits and investments therein and all earnings thereon);

                  (h) all deposit accounts of such Grantor;

                  (i) all books, records, writings, data bases, information and
         other property relating to, used or useful in connection with,
         evidencing, embodying, incorporating or referring to, any of the
         foregoing in this Section;

                                        8          Subsidiary Security Agreement

<PAGE>

                  (j) all of such Grantor's other property and rights of every
         kind and description and interests therein; and

                  (k) all products, offspring, rents, issues, profits, returns,
         income and proceeds of and from any and all of the foregoing Collateral
         (including proceeds which constitute property of the types described in
         clauses (a) through (j) above, and, to the extent not otherwise
         included, all payments under insurance (whether or not the Collateral
         Agent is the loss payee thereof), or distributions or, rights arising
         out of, returns of and from, and any and all claims and/or insurance
         payments arising out of the loss, noncomformity, or interference with
         the use of, defects or infringements of rights in, or damage to any of
         the foregoing Collateral).

Notwithstanding the foregoing, "Collateral" shall not include (i) any general
intangibles or other rights arising under any contracts, instruments, licenses
or other documents as to which the grant of a security interest would (A)
constitute a violation of a valid and enforceable restriction in favor of a
third party on such grant, unless and until any required consents shall have
been obtained (provided that each Grantor shall use all commercially reasonable
efforts to obtain such consents) or (B) give any other party to such contract,
instrument, license or other document the right to terminate its obligations
thereunder, unless and until any required consents shall have been obtained and
(ii) investment property consisting of Capital Securities of an issuer that is a
Foreign Subsidiary (other than a Foreign Subsidiary that (i) is treated as a
partnership under the Code or (ii) is not treated as an entity that is separate
from (A) any Grantor, (B) any Person that is treated as a partnership under the
Code or (C) any "United States person" (as defined in Section 7701(a)(30) of the
Code)) of such Grantor, in excess of 65% of the total combined voting power of
all Capital Securities of each such Foreign Subsidiary; provided further,
however, that, in the event of any change in, or the introduction, adoption,
effectiveness, interpretation, reinterpretation or phase in of, any law or
regulation, directive or guideline of any Governmental Authority that could
reasonably be expected to alter the amount of United States federal income tax
that would otherwise be payable by such Grantor in the absence of such pledge,
the Collateral Agent or the Required Lenders may require such Grantor to pledge
such Capital Securities.

          SECTION 2.2. Security for Obligations. This Security Agreement and the
 Collateral in which the Secured Parties are granted a security interest in
 hereunder secures the payment of all Secured Obligations.

          SECTION 2.3. Grantors Remain Liable. Anything herein to the contrary
 notwithstanding

                   (a) each Grantor will remain liable under the contracts and
          agreements included in the Collateral to the extent set forth therein,
          and will perform all of its duties and obligations under such
          contracts and agreements to the same extent as if this Security
          Agreement had not been executed;

                                       9           Subsidiary Security Agreement

<PAGE>

                  (b) the exercise by any Secured Party of any of its rights
         hereunder will not release any Grantor from any of its duties or
         obligations under any such contracts or agreements included in the
         Collateral; and

                  (c) no Secured Party will have any obligation or liability
         under any contracts or agreements included in the Collateral by reason
         of this Security Agreement, nor will any, Secured Party be obligated to
         perform any of the obligations or duties of any Grantor thereunder or
         to take any action to collect or enforce any claim for payment assigned
         hereunder.

         SECTION 2.4. Security Interest Absolute, etc. This Security Agreement
shall in all respects be a continuing, absolute, unconditional and irrevocable
grant of security interest, and shall remain in full force and effect until the
Termination Date has occurred. All rights of the Secured Party and the security
interests granted to the Collateral Agent (for its benefit and the ratable
benefit of each other Secured Party) hereunder, and all obligations of each
Grantor hereunder, shall, in each case, be absolute, unconditional and
irrevocable irrespective of:

                  (a) surrender or non-perfection of any collateral, or any
         amendment to or waiver or release or addition to, or consent to or
         departure from, any other guaranty held by any Secured Party securing
         any of the Secured Obligations;

                  (b) any change in the time, place or manner of payment of,
          or in any other term of, all or any of the Secured Obligations, any
          waiver, indulgence, renewal, extension, amendment or modification of,
          or addition, consent or supplement to, or deletion from, or any other
          action or inaction under or in respect of, the Term Loan Agreement or
          the Revolving Credit Agreement, the other Credit Documents, or any
          other documents, instruments or agreements relating to the Secured
          Obligations or any other instrument or agreement referred to therein
          or any assignment or transfer of any thereof;

                  (c) any lack of validity or enforceability of the Term Loan
         Agreement, the Revolving Credit Agreement, the other Credit Documents,
         or any other document, instrument or agreement referred to therein or
         any assignment or transfer of any thereof;

                  (d) any furnishing to the Secured Parties of any additional
         security for the Secured Obligations, or any sale, exchange, release or
         surrender of, or realization on, any security for the Secured
         Obligations;

                  (e) any settlement or compromise of any of the Secured
         Obligations, any security therefor, or any liability of any other party
         with respect to the Secured Obligations, or any subordination of the
         payment of the Secured Obligations to the payment of any other
         liability of the Borrower;

                  (f) any bankruptcy, insolvency, reorganization, composition,
         adjustment, dissolution, liquidation or other like proceeding relating
         to any Grantor or the Borrower,

                                       10          Subsidiary Security Agreement

<PAGE>

         or any action taken with respect to this Security Agreement by any
         trustee or receiver, or by any court, in any such proceeding;

                  (g) any nonperfection of any security interest or lien on any
         collateral, or any amendment or waiver of, consent to, or departure
         from, any guaranty or security for all or any of the Secured
         Obligations;

                 (h) any application of sums paid by the Borrower or any other
         Person with respect to the Secured Obligations of the Borrower to the
         Secured Parties, regardless of what Secured Obligations of the Borrower
         remain unpaid;

                  (i) any act or failure to act by any Secured Party which may
         adversely affect a Grantor's subrogation rights, if any, against the
         Borrower to recover payments made under this Security Agreement; and

                  (j) any other circumstance which might otherwise constitute a
         defense available to, or a legal or equitable discharge of, any Credit
         Party, any surety or any guarantor (other than the Termination Date).

         SECTION 2.5. Postponement of Subrogation, etc. Each Grantor agrees that
it will not exercise any rights which it may acquire by way of rights of
subrogation under any Credit Document to which it is a party, nor shall any
Grantor seek or be entitled to seek any contribution or reimbursement from any
Credit Party, in respect of any payment made under any Credit Document or
otherwise, until following the Termination Date. Any amount paid to any Grantor
on account of any such subrogation rights prior to the Termination Date shall be
held in trust for the benefit of the Secured Parties and shall immediately be
paid and turned over to the Collateral Agent for its benefit and the ratable
benefit of each other Secured Party in the exact form received by such Grantor
(duly endorsed in favor of the Collateral Agent, if required), to be credited
and applied against the Secured Obligations, whether matured or unmatured, in
accordance with clause (b) of Section 6.1; provided, however, that if any
Grantor has made payment to the Secured Parties of all or any part of the
Secured Obligations and the Termination Date has occurred, then at such
Grantor's request, the Collateral Agent (on behalf of the Secured Parties) will,
at the expense of such Grantor, execute and deliver to such Grantor appropriate
documents (without recourse and without representation or warranty) necessary to
evidence the transfer by subrogation to such Grantor of an interest in the
Secured Obligations resulting from such payment. In furtherance of the
foregoing, at all times prior to the Termination Date, each Grantor shall
refrain from taking any action or commencing any proceeding against any Credit
Party (or its successors or assigns, whether in connection with a bankruptcy
proceeding or otherwise) to recover any amounts in respect of payments made
under this Security Agreement to any Secured Party.

          SECTION 2.6. Reinstatement. If any payment made in respect of any
Secured Obligations is rescinded or must otherwise be restored by Secured Party
and, pursuant to Section

                                       11          Subsidiary Security Agreement

<PAGE>

2.4, the security interest granted herein shall have terminated, this Agreement
and such security interest shall be reinstated and otherwise restored all as
though such payment had not been made.

                                   ARTICLE III
                         REPRESENTATIONS AND WARRANTIES

         In order to induce the Secured Parties to enter into the Term Loan
Agreement and the Revolving Credit Amendment and the other Credit Documents as
applicable, each Grantor represents and warrants to each Secured Party as set
forth below.

         SECTION 3.1. As to Capital Securities of Subsidiaries. With respect to
any Subsidiary of any Grantor that is

                  (a) a corporation, business trust, joint stock company or
          similar Person, all Capital Securities issued by such Subsidiary are
          duly authorized and validly issued, fully paid and non-assessable, and
          represented by a certificate; and

                  (b) a partnership or limited liability company, no Capital
          Securities issued by such Subsidiary (i) are dealt in or traded on
          securities exchanges or in securities markets, (ii) expressly provide
          that such Capital Securities are a security governed by Article 8 of
          the UCC, (iii) are held in a securities account, or (iv) are
          represented by a certificate.

The percentage of the issued and outstanding Capital Securities of each
Subsidiary pledged by each Grantor hereunder are as set forth on Schedule I
hereto. Except as set forth in Schedule I hereto, no Grantor has any
Subsidiaries, the Capital Securities of which are not pledged pursuant to this
Security Agreement.

         SECTION 3.2. Intercompany Notes. All Intercompany Notes have been duly
authorized, executed, endorsed, issued and delivered, and are the legal, valid
and binding obligation of the issuers thereof, and are not in default.

         SECTION 3.3. Location of Collateral, etc. All of the Equipment,
Inventory, lock boxes and deposit accounts of each Grantor are located at the
places specified in Item A, Item B and Item C respectively, of Schedule II
hereto, as each such Item may be supplemented or otherwise modified from time to
time pursuant clause (a) of Section 4.2. None of the Equipment and Inventory
has, within the four months preceding the date of this Security Agreement, been
located at any place other than the places specified in Item A and Item B,
respectively, of Schedule II hereto except as set forth in a footnote thereto.
The true legal name as registered in the jurisdiction in which any Grantor is
organized or incorporated, the state of incorporation or organization, the
place(s) of business and the chief executive office of such Grantor and the
office(s) where such Grantor keeps its records concerning the Receivables, and
all originals of all chattel paper which evidence Receivables, are located at
the addresses set forth in Item D of Schedule II hereto, as each such Item may
be supplemented or otherwise modified from time to time pursuant clause (a) of
Section 4.3. No Grantor has any trade names other than those set forth in Item E
of Schedule II

                                       12         Subsidiary Security@ Agreement

<PAGE>

hereto. During, the four months preceding the date hereof, no Grantor has been
known by any legal name different from the one set forth on the signature page
hereto, nor has any Grantor been the subject of any merger, consolidation,
conversion or other corporate reorganization, except as set forth in Item F of
Schedule II hereto. Each Grantor's federal taxpayer identification number is
(and, during the four months preceding the date hereof, such Grantor has not had
a federal taxpayer identification number different from the one) set forth in
Item of Schedule II hereto. If the Collateral of any Grantor includes any
Inventory located in the State of California, such Grantor is not a "retail
merchant" within the meaning of Section 9102 of the California UCC. All
Receivables evidenced by a promissory note or other instrument, negotiable
document or chattel paper have been duly endorsed and accompanied by duly
executed instruments of transfer or assignment, all in form and substance
satisfactory to the Collateral Agent and delivered and pledged to the Collateral
Agent pursuant to Section 4.6. No Grantor is a party to any federal, state or
local government contract except as set forth in Item H of Schedule II hereto.

         SECTION 3.4. Ownership, No Liens, etc. Each Grantor owns its Collateral
free and clear of any Lien, except for Liens (a) created by this Security
Agreement, and, in the case of Collateral other than any investment property
(including Capital Securities of any Subsidiary of such Grantor) in  which such
Grantor has an interest, (b) permitted by Section 7.02 of the Term Loan
Agreement and the Revolving Credit Agreement. No effective financing statement
or other filing similar in effect covering any Collateral is on file in any
recording office, except those filed in favor of the Collateral Agent relating
to this Security Agreement or those tiled in connection with Liens permitted by
Section 7.02 of the Term Loan Agreement and the Revolving Credit Agreement.

         SECTION 3.5. Possession of Inventory, etc. Each Grantor agrees that it
will maintain exclusive possession of its goods, instruments and Inventory,
other than Inventory in transit in the ordinary course of business and Inventory
which is in the possession or control of a warehouseman, bailee agent or other
Person (other than a Person controlled by or under common control with such
Grantor) that has been notified of the security interest created in favor of the
Secured Parties pursuant to this Security Agreement, and has agreed to hold such
Inventory subject to the Secured Parties' Lien and waive any Lien held by it
against such Inventory.

         SECTION 3.6. Negotiable Documents. Instruments and Chattel Paper. Each
Grantor has delivered to the Collateral Agent possession of all originals of all
negotiable documents, instruments and chattel paper owned or held by such
Grantor on the date hereof and agrees that it will, promptly following receipt,
deliver to the Collateral Agent possession of all originals of negotiable
documents, instruments and chattel paper that it acquires following the date
hereof.

         SECTION 3.7. Intellectual Property Collateral. With respect to any
material Intellectual Property Collateral:

                  (a) such Intellectual Property Collateral is subsisting and
         has not been adjudged invalid or unenforceable, in whole or in part;

                  (b) such Intellectual Property Collateral is valid and
         enforceable;

                                       13          Subsidiary Security Agreement

<PAGE>

                  (c) each Grantor has made all necessary filings and
         recordations to protect its interest in such Intellectual Property
         Collateral, including recordations of all of its interests in the
         Patent Collateral and Trademark Collateral in the United States Patent
         and Trademark Office and in corresponding offices throughout the world,
         and its claims to the Copyright Collateral in the United States
         Copyright Office and in corresponding offices throughout the world;

                  (d) each Grantor is the exclusive owner of the entire and
         unencumbered right, title and interest in and to such Intellectual
         Property Collateral and no claim has been made that the use of such
         Intellectual Property Collateral does or may violate the asserted
         rights of any third party; and

                  (e) each Grantor has performed and will continue to perform
         all acts and has paid and will continue to pay all required fees and
         taxes to maintain each and every such item of Intellectual Property
         Collateral in full force and effect throughout the world, as
         applicable.

Each Grantor owns directly or is entitled to use by license or otherwise, all
patents, Trademarks, Trade Secrets, copyrights, mask works, licenses,
technology, know-how, processes and rights with respect to any of the foregoing
used in, necessary for or of importance to the conduct of such Grantor's
business.

         SECTION 3.8. Validity, etc. This Security Agreement creates a valid
security interest in the Collateral securing the payment of the Secured
Obligations. Each Grantor has executed and delivered to the Collateral Agent
originals of all financing statements suitable for filing in the appropriate
offices and (a) in the case of Collateral comprised of certificated securities
or instruments, has delivered such Collateral to the Collateral Agent, duly
endorsed in blank and (b) in the case of Collateral comprised of uncertificated
securities and other investment property (other than certificated securities),
has taken such actions causing the Collateral Agent to have "control" (as
defined in Section 8-106 of the UCC, as such term relates to investment property
(other than certificated securities or commodity contracts), or as used in
Section 9-106(b) of the UCC, as such term ,relates to commodity contracts) of
such Collateral.

         SECTION 3.9. Authorization. Approval, etc. Except as have been obtained
or made and are in full force and effect, no authorization, approval or other
action by, and no notice to or filing with, any Governmental Authority or
regulatory body is required either

                  (a) for the grant by each Grantor of the security interest
         granted hereby, the pledge by each Grantor of any Collateral pursuant
         hereto or for the execution, delivery and performance of this Security
         Agreement by each Grantor;

                  (b) for the perfection of or the exercise by any Secured Party
         of its rights and remedies hereunder (except for whatever action is
         necessary for filing in the appropriate offices); or

                                       14          Subsidiary Security Agreement

<PAGE>

                  (c) for the exercise by the Collateral Agent of the voting or
         other rights provided for in this Security Agreement, or, except with
         respect to any securities issued by a Subsidiary of any Grantor, as may
         be required in connection with a disposition of such securities by laws
         affecting the offering and sale of securities generally, the remedies
         in respect of the Collateral pursuant to this Security Agreement.

         SECTION 3.10. Compliance with Laws. Each Grantor is in compliance with
the requirements of all applicable laws (including the provisions of the Fair
Labor Standards Act), rules and regulations, the non-compliance with any of the
Term Loan Agreement and the Revolving Credit Amendment which could reasonably be
expected to materially and adversely affect the value of the Collateral.

         SECTION 3.11. Best Interests. It is in the best interests of each
Grantor to execute this Security Agreement inasmuch as such Grantor will, as a
result of being a Subsidiary of the Borrower, derive substantial direct and
indirect benefits from the Term Loan Agreement and the Revolving Credit
Amendment, and each Grantor agrees that the Secured Parties are relying on this
representation in agreeing to the Term Loan Agreement and the Revolving Credit
Amendment.

         SECTION 3.12. Representations and Warranties. Each Grantor represents
and warrants as to itself that all representations and warranties relating to it
contained in Sections 5.01 through 5.06 of the Term Loan Agreement and the
Revolving Credit Agreement are true and correct.

                                   ARTICLE IV
                                    COVENANTS

         Each Grantor covenants and agrees that, until the Termination Date has
occurred, such Grantor will perform, comply with and be bound by the obligations
set forth below.

         SECTION 4.1. As to Investment Property and Intercompany Notes; Etc.

         SECTION 4.1.1. Capital Securities of Subsidiaries. Each Grantor will
cause each of its Subsidiaries that is

                  (a) a corporation, business trust, joint stock company or
         similar Person, to provide in its Organic Documents that all
         securities issued by such Subsidiary will be represented by a
         certificate; and

                  (b) a partnership or limited liability company, to provide in
         its Organic Documents that no Capital Securities issued by such
         Subsidiary will (i) be dealt in or traded on securities exchanges or in
         securities markets, (ii) expressly provide that such Capital Securities
         are securities governed by Article 8 of the UCC, (iii) be held in a
         securities account, or (iv) be represented by a certificate.

                                       15          Subsidiary Security Agreement

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         SECTION 4.1.2 Investment Property (other than Certificated Securities).
With respect to any investment property (other than certificated securities)
owned by any Grantor, such Grantor will cause a Securities Control Agreement
relating to such investment property to be executed and delivered by such
Grantor and the applicable broker or securities or commodity intermediary in
favor of the Collateral Agent.

         SECTION 4.1.3 Stock Powers, etc. Each Grantor agrees that all
certificated securities delivered by such Grantor pursuant to this Security
Agreement will be accompanied by duly executed undated blank stock powers, or
other equivalent instruments of transfer acceptable to the Collateral Agent.

         SECTION 4.1.4 Continuous Pledge. Each Grantor will deliver to the
Collateral Agent and at all times keep pledged to the Collateral Agent pursuant
hereto, on a first-priority, perfected basis all investment property
constituting Collateral, all Dividends and Distributions with respect thereto,
all Intercompany Notes (duly endorsed by such Grantor to the order of the
Collateral Agent), and all interest and principal with respect to the
Intercompany Notes, and all proceeds and rights from time to time received by or
distributable to such Grantor in respect of any of the foregoing Collateral.

         SECTION 4.1.5 Voting Rights; Dividends, etc. Each Grantor agrees:

                  (a) promptly upon receipt of notice of the occurrence and
         continuance of a Specified Event from the Collateral Agent and without
         any request therefor by the Collateral Agent, so long as such Specified
         Event shall continue, to deliver (properly endorsed where required
         hereby or requested by the Collateral Agent) to the Collateral Agent
         all Dividends and Distributions with respect to investment property,
         all interest, principal and other cash payments on Intercompany Notes,
         and all proceeds of the Collateral, in each case thereafter received by
         such Grantor, all of which shall be held by the Collateral Agent as
         additional Collateral; and

                  (b) immediately upon the occurrence and continuance of a
          Specified Event and so long as the Collateral Agent has notified such
          Grantor of the Collateral Agent's intention to exercise its voting
          power under this clause, such Grantor agrees

                            (i) that the Collateral Agent may exercise (to the
                   exclusion of such Grantor) the voting power and all other
                   incidental rights of ownership with respect to any investment
                   property constituting Collateral and such Grantor hereby
                   grants the Collateral Agent an irrevocable proxy, exercisable
                   under such circumstances, to vote such investment property;
                   and

                            (ii) to promptly deliver to the Collateral Agent
                    such additional proxies and other documents as may be
                    necessary to allow the Collateral Agent to exercise such
                    voting power.

                                       16          Subsidiary Security Agreement

<PAGE>

All Dividends, Distributions, interest, principal, cash payments, and proceeds
which may at any time and from time to time be held by any Grantor but which
such Grantor is then obligated to deliver to the Collateral Agent, shall, until
delivery to the Collateral Agent, be held by such Grantor separate and apart
from its other property in trust for the Secured Parties. The Collateral Agent
agrees that unless a Specified Event shall have occurred and be continuing and
the Collateral Agent shall have given the notice referred to in clause (b), each
Grantor will have the exclusive voting power with respect to any investment
property constituting Collateral and the Collateral Agent will, upon the written
request of such Grantor, promptly deliver such proxies and other documents,
if any, as shall be reasonably requested by such Grantor which are necessary to
allow such Grantor to exercise that voting power; provided, however, that no
vote shall be cast, or consent, waiver, or ratification given, or action taken
by such Grantor that would impair any such Collateral or be inconsistent with or
violate any provision of any Credit Document.

         SECTION 4.1.6 Organic Documents. No Grantor will amend, supplement or
otherwise modify or permit, consent to or suffer to occur any amendment,
supplement or modification of, any terms or provisions contained in, or
applicable to, any Organic Document of any Subsidiary that has issued Capital
Securities included in the Collateral if the effect thereof is to impair, or is
in any manner adverse to, the rights or interests of any Secured Party unless
consented to by the Collateral Agent.

         SECTION 4.2. As to Equipment and Inventory. Each Grantor hereby agrees
that it will

                  (a) keep ah the Equipment and Inventory (other than Equipment
         and Inventory sold in accordance with Section 7.04 of the Term Loan
         Agreement and the Revolving Credit Agreement, motor vehicles and
         Inventory in transit) at the places therefor specified in Section 3.3
         or, upon 30 days' prior written notice to the Collateral Agent, at such
         other places in a jurisdiction where all representations and warranties
         set forth in Article III shall be true and correct, and all action
         required pursuant to Section 4.6 shall have been taken with respect to
         the Equipment and Inventory;

                  (b) cause the Equipment to be maintained and preserved in good
         repair and working order, ordinary wear and tear excepted, and in
         accordance with any manufacturer's manual; and forthwith, or in the
         case of any material loss or damage to any of the Equipment, as quickly
         as practicable after the occurrence thereof, make or cause to be made
         all repairs, replacements, and other improvements in connection
         therewith which are necessary or desirable to such end; and promptly
         furnish to the Collateral Agent a statement respecting any material
         loss or damage to any of the Equipment; and

                  (c) pay promptly when due all property and other taxes,
         assessments and governmental charges or levies imposed upon, and all
         claims (including claims for labor, materials and supplies) against,
         the Equipment and Inventory, except to the extent the validity thereof
         is being contested in good faith by appropriate proceedings and for
         which adequate reserves in accordance with GAAP have been set aside.

                                       17          Subsidiary Security Agreement

<PAGE>

         SECTION. 4.3. As to Receivables. (a) Each Grantor will keep its chief
executive office, its jurisdiction of formation, the office(s) where it keeps
its records concerning the Receivables and all originals of all chattel paper
which evidences Receivables located at the addresses set forth in Item of
Schedule II hereto, or, upon 30 days' prior written notice to the Collateral
Agent, at such other locations in a jurisdiction where all actions required by
Section 4.6 shall have been taken with respect to the Receivables and other
Collateral. No Grantor will change its name or federal taxpayer identification
number or jurisdiction of formation except upon 30 days' prior written notice to
the Collateral Agent. In addition, each Grantor shall supplement the information
contained in Schedule II hereto on the Compliance Certificate on each date a
Compliance Certificate is required to be delivered to the administrative agent
under the Revolving Credit Agreement or the Term Loan Agreement, including any
changes to the information set forth in Section 3.3.

                  (b) Each Grantor shall have the right to collect all
         Receivables so long as no Specified Event shall have occurred and be
         continuing.

                  (c) Upon (i) the occurrence and continuance of a Specified
         Event or any other Event of Default and (ii) the delivery of written
         notice by the Collateral Agent to each Grantor, all proceeds of
         Collateral received by such Grantor shall be delivered in kind to the
         Collateral Agent for deposit to a deposit account (the "Collateral
         Account") of such Grantor maintained with the Collateral Agent, and
         such Grantor shall not commingle any such proceeds, and shall hold
         separate and apart from all other property, all such proceeds in
         express trust for the benefit of the Secured Parties until delivery
         thereof is made to the Collateral Agent.

                  (d) Following the delivery of notice pursuant to clause
         (c)(ii) of this Section, the Collateral Agent shall have the right to
         apply any amount in the Collateral Account to the payment of any
         Secured Obligations which are due and payable.

                  (e) With respect to the Collateral Account, it is hereby
         confirmed and agreed that (i) deposits in each Collateral Account are
         subject to a security interest as contemplated hereby, (ii) each such
         Collateral Account shall be under the sole dominion and control of the
         Collateral Agent and (iii) the Collateral Agent shall have the sole
         right of withdrawal over such Collateral Account.

         SECTION 4.4. As to Collateral.

                  (a) Subject to clause (b) of this Section, each Grantor (i)
         may in the ordinary course of its business, at its own expense, sell,
         lease or furnish under the contracts of service any of the, Inventory
         normally held by such Grantor for such purpose, and use and consume, in
         the ordinary course of its business, any raw materials, work in process
         or materials normally held by such Grantor for such purpose, (ii) will,
         at its own expense, endeavor to collect, as and when due, all amounts
         due with respect to any of the Collateral, including the taking of such
         action with respect to such collection as the Collateral Agent may
         reasonably request following the occurrence of a Specified Event or, in
         the absence of such request, as

                                       18          Subsidiary Security Agreement

<PAGE>

         such Grantor may deem advisable, and (iii) may grant, in the ordinary
         course of business, to any party obligated on any of the Collateral,
         any rebate, refund or allowance to which such party may be lawfully
         entitled, and may accept, in connection therewith, the return of goods,
         the sale or lease of which shall have given rise to such Collateral.

                  (b) At any time following the occurrence and during the
         continuance of a Specified Event, whether before or after the maturity
         of any of the Secured Obligations, the Collateral Agent may (i) revoke
         any or all of the rights of any Grantor set forth in clause (a), (ii)
         notify any parties obligated on any of the Collateral to make payment
         to the Collateral Agent of any amounts due or to become due thereunder
         and (iii) enforce collection of any of the Collateral by suit or
         otherwise and surrender, release, or exchange all or any part thereof,
         or compromise or extend or renew for any period (whether or not longer
         than the original period) any indebtedness, thereunder or evidenced
         thereby.

                  (c) Upon request of the Collateral Agent following the
         occurrence and during the continuance of a Specified Event, each
         Grantor will, at its own expense, notify any parties obligated on any
         of the Collateral to make payment to the Collateral Agent of any
         amounts due or to become due thereunder.

                  (d) Each Grantor hereby authorizes the Collateral Agent to
         endorse, in the name of such Grantor, any item, howsoever received by
         the Collateral Agent, representing any payment on or other proceeds of
         any of the Collateral.

         SECTION 4.5. As to Intellectual Property Collateral. Except, in the
case of clauses (a)(i), (b) and (d) below, for any items marked with an asterisk
in Schedule III, IV or V hereto, which the Grantors do not currently use and do
not intend to use at any time in the future, each Grantor covenants and agrees
to comply with the following provisions as such provisions relate to any
Intellectual Property Collateral of such Grantor:

                  (a) such Grantor will not (i) do or fail to perform any act
         whereby any of the, Patent Collateral may lapse or become abandoned or
         dedicated to the public or unenforceable, (ii) permit any of its
         licensees to (A) fail to continue to use any of the Trademark
         Collateral in order to maintain all of the Trademark Collateral in full
         force free from any claim of abandonment for non-use, (B) fail to
         maintain as in the past the quality of products and services offered
         under all of the Trademark Collateral, (C) fail to employ all of the
         Trademark Collateral registered with any federal or state or foreign
         authority with an appropriate notice of such registration, (D) adopt or
         use any other Trademark which is confusingly similar or a colorable
         imitation of any of the Trademark Collateral, (E) use any of the
         Trademark Collateral registered with any federal, state or foreign
         authority except for the uses for which registration or application for
         registration of all of the Trademark Collateral has been made or (F) do
         or permit any act or knowingly omit to do any act whereby any of the
         Trademark Collateral may lapse or become invalid or unenforceable, or
         (G) do or permit any act or knowingly omit to do any act whereby any of
         the Copyright Collateral or any of the Trade Secrets Collateral may
         lapse or become invalid or

                                       19          Subsidiary Security Agreement

<PAGE>

unenforceable or placed in the public domain except upon expiration of the end
of an unrenewable term of a registration thereof, unless, in the case of any of
the foregoing requirements in clauses (i) or (ii), such Grantor shall either (x)
reasonably and in good faith determine that any of such Intellectual Property
Collateral is of negligible economic value to such Grantor, or (y) have a valid
business purpose to do otherwise;

         (b) such Grantor shall promptly notify the Collateral Agent if it
 knows, or has reason to know, that any application or registration relating to
 any material item of the Intellectual Property Collateral may become abandoned
 or dedicated to the public or placed in the public domain or invalid or
 unenforceable, or of any adverse determination or development (including the
 institution of, or any such determination or development in, any proceeding in
 the United States, Patent and Trademark Office, the United States Copyright
 Office or any foreign counterpart thereof or any court) regarding such
 Grantor's ownership of any of the Intellectual Property Collateral, its right
 to register the same or to keep and maintain and enforce the same;

          (c) in no event will such Grantor or any of its agents, employees,
 designees or licensees file an application for the registration of any
 Intellectual Property Collateral with the United States Patent and Trademark
 Office, the United States Copyright Office or any similar office or agency in
 any other country or any political subdivision thereof, unless it promptly
 informs the Collateral Agent, and upon request of the Collateral Agent,
 executes and delivers all agreements, instruments and documents as the
 Collateral Agent may reasonably request to evidence the Collateral Agent's
 security interest in such Intellectual Property Collateral;

         (d) such Grantor will take all necessary steps, including in any
proceeding before the United States Patent and Trademark Office, the United
States Copyright Office or any similar office or agency in any other country or
any political subdivision thereof, to maintain and pursue any application (and
to obtain the relevant registration) filed with respect to, and to maintain any
registration of, the Intellectual Property Collateral, including the filing of
applications for renewal, affidavits of use, affidavits of incontestability and
opposition, interference and cancellation proceedings and the payment of fees
and taxes (except to the extent that dedication, abandonment or invalidation is
permitted under the foregoing clause (a) or (b); and

         (e) such Grantor will promptly (but no less than quarterly) execute and
deliver to the Collateral Agent (as applicable) a Patent Security Agreement,
Trademark Security Agreement and/or Copyright Security Agreement, as the case
may be, in the forms of Exhibit B, Exhibit C and Exhibit D hereto following its
obtaining an interest in any such Intellectual Property, and shall execute and
deliver to the Collateral Agent any other document required to acknowledge or
register or perfect the Secured Parties' interest in any part of such item of
Intellectual Property Collateral.

                                       20          Subsidiary Security Agreement

<PAGE>

         SECTION 4.6. Further Assurances, etc. Each Grantor will warrant and
defend the security interest herein granted unto the Secured Parties by such
Grantor in and to the Collateral (and all right, title and interest represented
by such Collateral) against the claims and demands of all Persons whomsoever.
Each Grantor agrees that, from time to time at its own expense, it will promptly
execute and deliver all further instruments and documents, and take all further
action, that may be necessary or that the Collateral Agent may reasonably
request, in order to perfect, preserve and protect any security interest granted
or purported to be granted hereby or to enable any Secured Party to exercise and
enforce its rights and remedies hereunder with respect to any Collateral.
Without limiting the generality of the foregoing, each Grantor:

                  (a) will from time to time upon the request of the Collateral
         Agent, promptly deliver to the Collateral Agent such stock powers,
         instruments and similar documents, satisfactory in form and substance
         to the Collateral Agent, with respect to such Collateral as the
         Collateral Agent may reasonably request and will, from time to time
         upon the request of the Collateral Agent after the occurrence and
         during the continuance of any Specified Event promptly transfer any
         Capital Securities constituting Collateral into the name of any nominee
         designated by the Collateral Agent for the ratable benefit of the
         Secured Parties; if any Receivable shall be evidenced by an instrument,
         negotiable document or chattel paper, deliver and pledge to the
         Collateral Agent hereunder such instrument, negotiable document or
         chattel paper duly endorsed and accompanied by duly executed
         instruments of transfer or assignment, all in form and substance
         satisfactory to the Collateral Agent;

                  (b) will execute and file (or caused to be filed) such
         financing statements or continuation statements, or amendments thereto,
         and such other instruments or notices (including any assignment of
         claim form under or pursuant to the federal assignment of claims
         statute, 31 U.S.C. ss. 3726, any successor or amended version thereof
         or any regulation promulgated under or pursuant to any version
         thereof), as may be necessary or that the Collateral Agent may
         reasonably request in order to perfect and preserve the security
         interests and other rights granted or purported to be granted to the
         Collateral Agent or the other Secured Parties hereby;

                  (c) hereby authorizes the Collateral Agent to file such
         financing statements and other documents without its signature (to the
         extent allowed by applicable law);

                  (d) shall not enter into any agreement amending, supplementing
         or waiving any provision of any Intercompany Note (including any
         underlying instrument pursuant to which such Intercompany Note is
         issued), that compromises, releases or extends the time for payment of
         any obligation of the maker thereof;

                  (e) shall not take or omit to take any action the taking or
         the omission of which would result in any impairment or alteration of
         any obligation of the maker of any Intercompany Note or other
         instrument constituting Collateral;

                                       21          Subsidiary Security Agreement

<PAGE>

                  (f) will furnish to the Collateral Agent, from time to time as
         the Collateral Agent may reasonably request, statements and schedules
         further identifying and describing the Collateral and such other
         reports in connection with the Collateral as the Collateral Agent may
         reasonably request, all in reasonable detail;

                  (g) will maintain or cause to be maintained with financially
         sound and reputable insurers, insurance with respect to its properties
         and business, and the properties and business of its Subsidiaries,
         against loss or damage of the kinds customarily insured against by
         reputable companies in the same or similar businesses, such insurance
         to be of such types and in such amounts as are customary for such
         companies under similar circumstances; and

                  (h) shall not change its state of organization or
         incorporation or its name, identity or corporate structure such that
         any financing statement filed to perfect the Collateral Agent's
         interests under this Security Agreement would be come seriously
         misleading, unless such Grantor shall have given the Collateral Agent
         not less than 30 days' prior notice of such change (provided that this
         Section 4.6(h) shall not be deemed authorize any change or transaction
         prohibited under the Term Loan Agreement or the Revolving Credit
         Agreement).

With respect to the foregoing and the grant of the security interest hereunder,
each Grantor hereby authorizes the Collateral Agent to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Collateral without the signature of such Grantor where permitted
by law. Each Grantor agrees that a carbon, photographic or other reproduction of
this Security Agreement or any financing statement covering the Collateral or
any part thereof shall be sufficient as a financing statement where permitted by
law.

          SECTION 4.7. Deposit Accounts. From and after the date hereof, no
Grantor shall maintain any Deposit Account or deposit any items or amounts in
any Deposit Account, except: (i) Deposit Accounts maintained with the Collateral
Agent or any "Lender" under either the Term Loan Agreement or the Revolving
Credit Agreement, or (ii) Deposit Accounts as to which each respective Grantor,
the Collateral Agent and the depositary bank have entered into a Control
Agreement that the depositary bank will comply with instructions originated by
the Collateral Agent directing disposition of the funds in the account without
further consent by such Grantor.

          SECTION 4.8. Transfers and Other Liens. No Grantor shall:

                  (a) sell, assign (by operation of law or otherwise) or
         otherwise dispose of any of the Collateral, except as permitted by the
         Term Loan Agreement and the Revolving Credit Agreement; or

                  (b) create or suffer to exist any Lien upon or with respect to
         any of the Collateral to secure Indebtedness of any Person, except for
         the security interest created by this Security Agreement and except as
         permitted by the Term Loan Agreement and the Revolving Credit
         Agreement.

                                       22          Subsidiary Security Agreement

<PAGE>

                                    ARTICLE V
                               THE COLLATERAL AGENT

         SECTION 5.1. Collateral Agent Appointed Attorney-in-Fact. Each Grantor
hereby irrevocably appoints the Collateral Agent its attorney-in-fact, with full
authority in the place and stead of such Grantor and in the name of such Grantor
or otherwise, from time to time in the Collateral Agent's discretion, following
the occurrence and during the continuance of a Specified Event, to take any
action and to execute any instrument which the Collateral Agent may deem
necessary or advisable to accomplish the purposes of this Security Agreement,
including:

                  (a) to ask, demand, collect, sue for, recover, compromise,
         receive and give acquittance and receipts for moneys due and to become
         due under or in respect of any of the Collateral;

                  (b) to receive, endorse, and collect any drafts or other
         instruments, documents and chattel paper, in connection with clause (a)
         above;

                  (c) to file any claims or take any action or institute any
         proceedings which the Collateral Agent may deem necessary or desirable
         for the collection of any of the Collateral or otherwise to enforce the
         rights of the Collateral Agent with respect to any of the Collateral;
         and

                  (d) to perform the affirmative obligations of such Grantor
         hereunder (including all obligations of such Grantor pursuant to
         Section 4.6).

Each Grantor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.

         SECTION 5.2. Collateral Agent May Perform. If any Grantor fails to
perform any agreement contained herein, the Collateral Agent may itself perform,
or cause performance of, such agreement, and the reasonable expenses of the
Collateral Agent incurred in connection therewith shall be payable by such
Grantor pursuant to Section 6.4.

         SECTION 5.3. Collateral Agent Has No Duty. The powers conferred on the
Collateral Agent hereunder are solely to protect its interest (on behalf of the
Secured Parties) in the Collateral and shall not impose any duty on it to
exercise any such powers. Except for reasonable care of any Collateral in its
possession and the accounting for moneys actually received by it hereunder, the
Collateral Agent shall have no duty as to any Collateral or responsibility for

                  (a) ascertaining or taking action with respect to calls,
         conversions, exchanges, maturities, tenders or other matters relative
         to any investment property, whether or not the Collateral Agent has or
         is deemed to have knowledge of such matters, or

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<PAGE>

                  (b) taking any necessary steps to preserve rights against
         prior parties or any other rights pertaining to any Collateral.

         SECTION 5.4. Reasonable Care. The Collateral Agent is required to
exercise reasonable care in the custody and preservation of any of the
Collateral in its possession; provided, however, that the Collateral Agent shall
be deemed to have exercised reasonable care in the custody and preservation of
any of the Collateral, if it takes such action for that purpose as any Grantor
reasonably requests in writing at times other than upon the occurrence and
during the continuance of any Event of Default, but failure of the Collateral
Agent to comply with any such request at any time shall not in itself be deemed
a failure to exercise reasonable care, provided, further that the Collateral
Agent shall have no liability to any Grantor or any Secured Party except to the
extent caused by its gross negligence or willful misconduct.

                                   ARTICLE VI
                                    REMEDIES

         SECTION 6.1. Certain Remedies. If any Event of Default shall have
occurred and be continuing:

                  (a) The Collateral Agent may exercise in respect of the
         Collateral, in addition to other rights and remedies provided for
         herein or otherwise available to it, all the rights and remedies of a
         secured party on default under the UCC (whether or not the UCC applies
         to the affected Collateral) and also may

                           (i) require each Grantor to, and such Grantor hereby
                  agrees that it will, at its expense and upon request of the
                  Collateral Agent forthwith, assemble all or part of the
                  Collateral as directed by the Collateral Agent and make it
                  available to the Collateral Agent at a place to be designated
                  by the Collateral Agent which is reasonably convenient to both
                  parties, and

                           (ii) without notice except as specified below, sell
                   the Collateral or any part thereof in one or more parcels at
                   public or private sale, at any of the Collateral Agent's
                   offices or elsewhere, for cash, on credit or for future
                   delivery, and upon such other terms as the Collateral Agent
                   may deem commercially reasonable. Each Grantor agrees that,
                   to the extent notice of sale shall be required by law, at
                   least ten days prior notice to such Grantor of the time and
                   place of any public sale or the time after which any private
                   sale is to be made shall constitute reasonable notification.
                   The Collateral Agent shall not be obligated to make any sale
                   of Collateral regardless of notice of sale having been given.
                   The Collateral Agent may adjourn any public or private sale
                   from time to time by announcement at the time and place fixed
                   therefor, and such sale may, without further notice, be made
                   at the time and place to which it was so adjourned.

                   (b) The Collateral Agent may

                                        24         Subsidiary Security Agreement

<PAGE>

                           (i) transfer all or any part of the Collateral into
                  the name of the Collateral Agent or its nominee, with or
                  without disclosing that such Collateral is subject to the Lien
                  hereunder,

                           (ii) notify the parties obligated on any of the
                  Collateral to make payment to the Collateral Agent of any
                  amount due or to become due thereunder,

                          (iii) enforce collection of any of the Collateral by
                 suit or otherwise, and surrender, release or exchange all or
                 any part thereof, or compromise or extend or renew for any
                 period (whether or not longer than the original period) any
                 obligations of any nature of any party with respect thereto,

                           (iv) endorse any checks, drafts, or other writings in
                  any Grantor's name to allow collection of the Collateral,

                           (v) take control of any proceeds of the Collateral,
                  and

                           (vi) execute (in the name, place and stead of any
                  Grantor) endorsements, assignments, stock powers and other
                  instruments of conveyance or transfer with respect to all or
                  any of the Collateral.

         SECTION 6.2. Securities Laws. If the Collateral Agent shall determine
to exercise its right to sell all or any of the Collateral pursuant to Section
6.1, each Grantor agrees that, upon request of the Collateral Agent, such
Grantor will, at its own expense:

                  (a) execute and deliver, and cause (or, with respect to any
         issuer which is not a Subsidiary of such Grantor, use its best efforts
         to cause) each issuer of the Collateral contemplated to be sold and the
         directors, officers, managers and trustees thereof to execute and
         deliver, all such instruments and documents, and do or cause to be done
         all such other acts and things, as may be necessary or, in the opinion
         of the Collateral Agent, advisable to register such Collateral under
         the provisions of the Securities Act of 1933, as from time to time
         amended (the "Securities Act"), and cause the registration statement
         relating thereto to become effective and to remain effective for such
         period as prospectuses are required by law to be furnished, and to make
         all amendments and supplements thereto and to the related prospectus
         which, in the reasonable opinion of the Collateral Agent, are necessary
         or advisable, all in conformity with the requirements of the Securities
         Act and the rules and regulations of the SEC applicable thereto;

                  (b) use its best efforts to qualify the Collateral under the
         state securities or "Blue Sky" laws and to obtain all necessary
         governmental approvals for the sale of the Collateral, as requested by
         the Collateral Agent;

                                        25         Subsidiary Security Agreement

<PAGE>

                  (c) cause (or, with respect to any issuer which is not a
         Subsidiary of such Grantor, use its best efforts to cause) each such
         issuer to make available to its security holders, as soon as
         practicable, an earnings statement that will satisfy the provisions of
         Section 11(a) of the Securities Act; and

                  (d) do or cause to be done all such other acts and things as
         may be necessary to make such sale of the Collateral or any part
         thereof valid and binding and in compliance with applicable law.

Each Grantor further acknowledges the impossibility of ascertaining the amount
of damages that would be suffered by any of the Secured Parties by reason of the
failure of such Grantor to perform any of the covenants contained in this
Section and, consequently, agrees that, if such Grantor shall fail to perform
any of such covenants, it shall pay, as liquidated damages and not as a penalty,
an amount equal to the value (as determined by an independent appraiser) of the
Collateral on the date the Collateral Agent shall demand compliance with this
Section.

         SECTION 6.3. Compliance with Restrictions. Each Grantor agrees that

                  (a) in any sale of any of the Collateral whenever an Event of
         Default shall have occurred and be continuing, the Collateral Agent is
         hereby authorized to comply with any limitation or restriction in
         connection with such sale as it may be advised by counsel is necessary
         in order to

                           (i) avoid any violation of applicable law (including
                  compliance with such procedures as may restrict the number of
                  prospective bidders and purchasers, require that such
                  prospective bidders and purchasers have certain
                  qualifications, and restrict such prospective bidders and
                  purchasers to Persons who will represent and agree that they
                  are purchasing for their own account for investment and not
                  with a view to the distribution or resale of such Collateral),
                  or

                           (ii) obtain any required approval of the sale or of
                  the purchaser by any Governmental Authority or official, and

                  (b) such compliance shall not result in such sale being
         considered or deemed not to have been made in a commercially reasonable
         manner, nor shall the Collateral Agent be liable nor accountable to
         such Grantor for any discount allowed by the reason of the fact that
         such Collateral is sold in compliance with any such limitation or
         restriction; provided that the Collateral Agent acted in compliance
         with Article 9 of the UCC.

         SECTION 6.4. Indemnity and Expenses.

                  (a) Each Grantor jointly and severally agrees to indemnify the
         Collateral Agent from and against any and all claims, losses and
         liabilities arising out of or resulting from this Security Agreement
         (including enforcement of this Security Agreement), except claims,

                                       26          Subsidiary Security Agreement

<PAGE>
         losses or liabilities resulting from the Collateral Agent's gross
         negligence or wilful misconduct.

                  (b) Each Grantor will, upon demand, pay to the Collateral
         Agent the amount of any and all reasonable expenses, including the
         reasonable fees and disbursements of its counsel and of any experts and
         agents, which the Collateral Agent may incur in connection with

                           (i)   the administration of each Credit Document,

                           (ii)  the custody, preservation, use or operation of,
                  or the sale of, collection from, or other realization upon,
                  any of the Collateral,

                           (iii) the exercise or enforcement of any of the
                  rights of the Collateral Agent or the Secured Parties
                  hereunder, and

                           (iv)  the failure by any Grantor to perform or
                  observe any of the provisions hereof.

                  (c) All of the foregoing fees, costs and expenses shall be
         part of the Secured Obligations and shall be secured by the Collateral.
         This Section 6.4 shall survive the termination of this Security
         Agreement.

         SECTION 6.5. Protection of Collateral. The Collateral Agent may from
time to time, at its option, perform any act which any Grantor fails to perform
after being requested in writing so to perform by the Collateral Agent (it being
understood that no such request need be given after the occurrence and during
the continuance of an Event of Default) and the Collateral Agent may from time
to time take any other action which the Collateral Agent reasonably deems
necessary for the maintenance, preservation or protection of any of the
Collateral or of its security interest therein.

         SECTION 6.6. Application of Proceeds. All cash proceeds received by the
Collateral Agent in respect of any sale of, collection from, or other
realization upon, all or any part of the proceeds of the Collateral shall be
applied by the Collateral Agent to payment of the Secured Obligations in the
following order unless a court of competent jurisdiction shall otherwise direct:

                  (a) FIRST, to payment of all reasonable costs and expenses of
         the Collateral Agent incurred in connection with the collection and
         enforcement of the Secured Obligations or of the security interest
         granted to the Collateral Agent pursuant to this Security Agreement;

                  (b) SECOND, to payment of that portion of the Secured
         Obligations constituting accrued and unpaid interest and fees, pro rata
         among the Secured Parties in accordance with the amount of such accrued
         and unpaid interest and fees owing to each of them;

                                       27          Subsidiary Security Agreement

<PAGE>

                  (c) THIRD, to payment of the principal of the Secured
         Obligations, pro rata among the Secured Parties in accordance with the
         amount of such principal owing to each of them;

                  (d) FOURTH, to payment of any other Secured Obligations (other
         than those listed above) pro rata among the Secured Parties in
         accordance with the amounts owing to each of them; and

                  (e) FIFTH, the balance, if any, after all of the Secured
         Obligations have been satisfied, to the applicable Grantor or to
         whosoever may be lawfully entitled to receive them; provided, that
         prior to the Termination Date, such balance may, in the discretion of
         the Collateral Agent, be used by the Collateral Agent as additional
         collateral to be applied at any time thereafter pursuant to this
         Section 6.6.

                                   ARTICLE VII
                            MISCELLANEOUS PROVISIONS

         SECTION 7.1. Credit Document. This Security Agreement is a "Credit
Document" executed pursuant to the Term Loan Agreement and the Revolving Credit
Agreement and shall (unless otherwise expressly indicated herein) be construed,
administered and applied in accordance with the terms and provisions thereof,
including Articles X thereof.

         SECTION 7.2. Binding on Successors, Transferees and Assigns;
Assignment. This Security Agreement shall remain in full force and effect until
the Termination Date has occurred, shall be binding upon each Grantor and its
successors, transferees and assigns and shall inure to the benefit of and be
enforceable by each Secured Party and its successors, transferees and assigns;
provided, however, that no Grantor may assign any of its obligations hereunder
without the prior written consent of the Collateral Agent. Without limiting the
foregoing, any Secured Party may assign or otherwise transfer all or any portion
of the Secured Obligations held by it to any other Person, and such other Person
shall thereupon become vested with all the rights and benefits in respect
thereof granted to such Secured Party under this Security Agreement or
otherwise, subject, however, to any contrary provisions in such assignment or
transfer, and to the applicable provisions of the Term Loan Agreement or the
Revolving Credit Agreement.

         SECTION 7.3. Amendments, etc. No amendment to or waiver of any
provision of this Security Agreement, nor consent to any departure by any
Grantor from its obligations under this Security Agreement, shall in any event
be effective unless the same shall be in writing and signed by the Collateral
Agent (on behalf of the Lenders or the Required Lenders or Super-Majority
Lenders, as the case may be, pursuant to Section 10.2 of the Term Loan Agreement
and the Revolving Credit Agreement) and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.

                                       28          Subsidiary Security Agreement

<PAGE>

          SECTION 7.4. Notices. All notices and other communications provided
for hereunder shall be given in the manner provided in Section 10.01 of the
Revolving Credit Agreement to the appropriate party at the address or facsimile
number of such party (in the case of any Grantor, in care of the Borrower)
pursuant to the Revolving Credit Agreement and shall be deemed given as provided
in the Revolving Credit Agreement.

          SECTION 7.5. Foreign Pledge Agreements. Without limiting any of the
rights, remedies, privileges or benefits provided hereunder to the Collateral
Agent for its benefit and the ratable benefit of each other Secured Party, each
Grantor and the Collateral Agent hereby agree that the terms and provisions of
this Security Agreement in respect of any Collateral subject to the pledge or
other lien of a Foreign Pledge Agreement are, and shall be deemed to be,
supplemental and in addition to the rights, remedies, privileges and benefits
provided to the Secured Parties under such Foreign Pledge Agreement and under
applicable law to the extent consistent with applicable law; provided, that, in
the event that the terms of this Security Agreement conflict or are inconsistent
with the applicable Foreign Pledge Agreement or applicable law governing such
Foreign Pledge Agreement, the terms of such Foreign Pledge Agreement or such
applicable law shall be controlling.

            SECTION 7.6. Release of Liens. Upon (a) a Permitted Asset Sale of
Collateral, (b) the consummation of a Permitted Receivables Purchase Facility,
but only with respect to such Collateral being sold thereunder (excluding any
interest being retained by a Grantor), or (c) the occurrence of the Termination
Date, the security interests granted herein shall automatically terminate with
respect to (i) such Collateral (in the case of clause (a) or (b)) or (ii) all
Collateral (in the case of clause (c)). Upon such termination, the Collateral
Agent will, at the applicable Grantor's sole expense, deliver to such Grantor,
without any representations, warranties or recourse of any kind whatsoever, all
terminated Collateral held by the Collateral Agent hereunder, and execute and
deliver to such Grantor such documents as such Grantor shall reasonably request
to evidence such termination.

           SECTION 7.7. Additional Grantors. Upon the execution and delivery by
any other Person of a supplement in the form of Annex I hereto, such Person
shall become a "Grantor" hereunder with the same force and effect as if it were
originally a party to this Security Agreement and named as a "Grantor"
hereunder. The execution and delivery of such supplement shall not require the
consent of any other Grantor hereunder, and the rights and obligations of each
Grantor hereunder shall remain in full force and effect notwithstanding the
addition of any new Grantor as a party to this Security Agreement.

           SECTION 7.8. No Waiver; Remedies. No failure on the part of any
Secured Party to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.

           SECTION 7.9. Section Cautions. Section captions used in this Security
Agreement are for convenience of reference only, and shall not affect the
construction of this Security Agreement.

                                       29          Subsidiary Security Agreement

<PAGE>
         SECTION 7.10. Severability. Wherever possible each provision of this
Security Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Security Agreement
shall be prohibited by or invalid under such law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Security Agreement.

         SECTION 7.11. Governing Law. Appointment Of Agent For Service Of
Process; Submission To Jurisdiction; Waiver of Jury Trial.

         (a) THIS SECURITY AGREEMENT WILL BE DEEMED TO BE A CONTRACT MADE UNDER
AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH
PURPOSE SECTION 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF
NEW YORK).

         (b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS SECURITY
AGREEMENT OR OTHERWISE RELATED HERETO MAY BE BROUGHT IN THE COURTS OF THE STATE
OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW
YORK, AND, BY EXECUTION AND DELIVERY OF THIS SECURITY AGREEMENT, EACH GRANTOR
HEREBY CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE JURISDICTION
OF THE AFORESAID COURTS SOLELY FOR THE PURPOSE OF ADJUDICATING ITS RIGHTS OR THE
RIGHTS OF THE COLLATERAL AGENT AND THE SECURED PARTIES WITH RESPECT TO THIS
SECURITY AGREEMENT OR ANY DOCUMENT RELATED HERETO. EACH GRANTOR HEREBY
IRREVOCABLY DESIGNATES UNITED STATES CORPORATION COMPANY AS THE DESIGNEE,
APPOINTEE AND AGENT OF SUCH GRANTOR TO RECEIVE, FOR AND ON BEHALF OF SUCH
GRANTOR, SERVICE OR PROCESS IN SUCH JURISDICTION IN ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS SECURITY AGREEMENT OR ANY DOCUMENT RELATED
HERETO AND SUCH SERVICE SHALL BE DEEMED COMPLETED THIRTY DAYS AFTER MAILING
THEREOF TO SAID AGENT. IT IS UNDERSTOOD THAT A COPY OF SUCH PROCESS SERVED ON
SUCH AGENT WILL BE PROMPTLY FORWARDED BY SUCH LOCAL AGENT AND BY THE SERVER OF
PROCESS BY MAIL TO THE RESPECTIVE GRANTOR AT ITS ADDRESS SET FORTH HEREIN, BUT
THE FAILURE OF SUCH GRANTOR TO RECEIVE SUCH COPY SHALL NOT, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, AFFECT IN ANY WAY THE SERVICE OF SUCH PROCESS. EACH
GRANTOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT LIMITATION,
ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS IN RESPECT OF THIS SECURITY
AGREEMENT OR ANY DOCUMENT RELATED THERETO. NOTHING HEREIN SHALL AFFECT THE RIGHT
OF THE COLLATERAL AGENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR
TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY GRANTOR IN ANY
OTHER JURISDICTION. TO THE EXTENT THAT ANY GRANTOR HAS OR HEREAFTER MAY ACQUIRE
ANY IMMUNITY FROM JURISDICTION

                                       30          Subsidiary Security Agreement

<PAGE>

OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE,
ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH
RESPECT TO ITSELF OR ITS PROPERTY, SUCH GRANTOR HEREBY IRREVOCABLY WAIVES TO
THE FULLEST EXTENT PERMITTED BY LAW SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS
UNDER THIS SECURITY AGREEMENT AND THE OTHER CREDIT DOCUMENTS TO WHICH IT IS A
PARTY.

          (c) TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH GRANTOR HEREBY
IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR IN CONNECTION WITH THIS SECURITY AGREEMENT OR ANY
OTHER CREDIT DOCUMENT OR ANY MATTER ARISING IN CONNECTION HEREUNDER OR
THEREUNDER. EACH GRANTOR ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND
SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH
OTHER CREDIT DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A
MATERIAL INDUCEMENT FOR SUCH GRANTOR ENTERING INTO THE CREDIT DOCUMENTS.

           SECTION 7.12. Counterparts. This Security Agreement may be executed
by the parties hereto in several counterparts, each of which shall be deemed to
be an original and all of which shall constitute together but one and the same
agreement.

           SECTION 7.13. Fraudulent Conveyance Limitation. Anything else in this
Security Agreement notwithstanding, the grant by the Borrower hereunder of a
security interest in the Collateral shall secure the Secured Obligations only
for the maximum amount that can be incurred without rendering this Security
Agreement void or voidable under applicable law relating to fraudulent
obligations, fraudulent conveyance or fraudulent transfer, and not any greater
amount.

                                       31          Subsidiary Security Agreement

<PAGE>

         IN WITNESS WHEREOF, each of the parties hereto has caused this Security
Agreement to be duly executed and delivered by its officer thereunto duly
authorized as of the date first above written.

                                    ALEXANDER CITY CASTING
                                    COMPANY, INC.

                                    By /s/  Alan J. Miller
                                      ----------------------------------------
                                       Name Printed: Alan J. Miller
                                       Title:  Secretary

                                    CAST-MATIC CORPORATION

                                    By /s/  Alan J. Miller
                                      ----------------------------------------
                                       Name Printed: Alan J. Miller
                                       Title:  Secretary

                                    COLUMBUS FOUNDRY, L.P.

                                    By /s/  Alan J. Miller
                                      ----------------------------------------
                                       Name Printed: Alan J. Miller
                                       Title:  Secretary

                                    DIVERSIFIED DIEMAKERS, INC.

                                    By /s/  Alan J. Miller
                                      ----------------------------------------
                                       Name Printed: Alan J. Miller
                                       Title:  Secretary

                                    FRISBY P.M.C., INCORPORATED

                                    By /s/  Alan J. Miller
                                      ----------------------------------------
                                       Name Printed: Alan J. Miller
                                       Title:  Secretary

                                                   Subsidiary Security Agreement

<PAGE>

                                    GANTON TECHNOLOGIES INC.

                                    By /s/  Alan J. Miller
                                      ----------------------------------------
                                       Name Printed: Alan J. Miller
                                       Title:  Secretary

                                    INTERMET HOLDING COMPANY

                                    By /s/  Alan J. Miller
                                      ----------------------------------------
                                       Name Printed: Alan J. Miller
                                       Title:  Secretary

                                    INTERMET INTERNATIONAL, INC.

                                    By /s/  Alan J. Miller
                                      ----------------------------------------
                                       Name Printed: Alan J. Miller
                                       Title:  Secretary

                                    IRONTON IRON INC.

                                    By /s/  Alan J. Miller
                                      ----------------------------------------
                                       Name Printed: Alan J. Miller
                                       Title:  Secretary

                                    LYNCHBURG FOUNDRY COMPANY

                                    By /s/  Alan J. Miller
                                      ----------------------------------------
                                       Name Printed: Alan J. Miller
                                       Title:  Secretary

                                                   Subsidiary Security Agreement

<PAGE>

                                   NORTHERN CASTINGS CORPORATION

                                   By /s/  Alan J. Miller
                                     ----------------------------------------
                                       Name Printed: Alan J. Miller
                                       Title:  Secretary

                                   SUDBURY, INC.

                                   By /s/  Alan J. Miller
                                     ----------------------------------------
                                       Name Printed: Alan J. Miller
                                       Title:  Secretary

                                   SUDM, INC.

                                   By /s/  Alan J. Miller
                                     ----------------------------------------
                                       Name Printed: Alan J. Miller
                                       Title:  Secretary

                                   TOOL PRODUCTS, INC.

                                   By /s/  Alan J. Miller
                                     ----------------------------------------
                                      Name Printed: Alan J. Miller
                                      Title:  Secretary

                                                   Subsidiary Security Agreement

<PAGE>

                                      WAGNER CASTINGS COMPANY

                                      By /s/  Alan J. Miller
                                        ---------------------------------------
                                         Name Printed: Alan J. Miller
                                         Title:  Secretary

                                      WAGNER HAVANA, INC.

                                      By /s/  Alan J. Miller
                                        ----------------------------------------
                                         Name Printed: Alan J. Miller
                                         Title:  Secretary

                                                   Subsidiary Security Agreement

<PAGE>

                                       THE BANK OF NOVA SCOTIA,
                                         as Collateral Agent

                                       By /s/  F.C.H. Ashby
                                          -------------------------------------
                                          Name Printed:  F.C.H. Ashby
                                          Title:  Senior Manager Loan Operations

                                       36       Subsidiary Security Agreement

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