Exhibit 4.20 - Security Agreement dated July 28, 1995
SECURITY AGREEMENT
THIS SECURITY AGREEMENT, dated as of July 28, 1995 (this "Security
Agreement"), made by CASTING TECHNOLOGY COMPANY, an Indiana general partnership
(the "Company"), in favor of NBD BANK, a Michigan banking corporation, as agent
(in such capacity, the "Agent") for NBD Bank and The Asahi Bank, Ltd., acting
through its Chicago branch (collectively, the "Banks"), which are parties to the
Credit Agreement hereinafter defined.
WITNESSETH:
WHEREAS, the Company has entered into a Credit and Intercreditor
Agreement of even date herewith (the "Credit Agreement"), with the Agent and the
Banks and pursuant to which the Banks have agreed to provide certain credit
facilities to the Company in an aggregate principal amount not to exceed
$25,000,000; and
WHEREAS, as a condition to the effectiveness of the Banks' obligations
under the Credit Agreement, the Company is required, among other things, to
grant to the Agent for the benefit of the Banks a first-priority security
interest in and to the Collateral hereinafter described;
NOW, THEREFORE, to secure (a) the prompt and complete payment of any
promissory notes issued by the Company pursuant to the Credit Agreement (the
"Notes"), (b) the performance of the covenants herein contained and any monies
expended by the Agent in connection therewith, (c) the payment of all
obligations and performance of all covenants of the Company under the Credit
Agreement and any other documents, agreements or instruments among the Company,
the Banks, and the Agent given in connection therewith, and (d) any and all
other indebtedness, obligations and liabilities of any kind of the Company to
the Banks or the Agent, now or hereafter existing, direct or indirect (including
without limitation any participation interest acquired by any Bank in any such
indebtedness, obligations or liabilities of the Company to any other person),
absolute or contingent, joint and/or several, secured or unsecured, arising by
operation of law or otherwise, and whether incurred by the Company as principal,
surety, endorser, guarantor, accommodation party or otherwise (all of the
aforesaid indebtedness, obligations and liabilities of the Company being herein
called the "Secured Obligations", and all of the documents, agreements and
instruments among the Company, the Banks and the Agent evidencing or securing
the repayment of, or otherwise pertaining to the Secured Obligations being
herein collectively called the "Operative Documents"), for value received and
pursuant to the Credit Agreement, the Company hereby grants, assigns and
transfers to the Agent for the benefit of the Agent and the Banks a
first-priority security interest in and to the following described property,
whether now owned or hereafter acquired and wherever located (collectively, the
"Collateral"):
(a) All machinery and equipment now owned or hereafter acquired,
wherever located, and whether used by the Company or any other person, or leased
by the Company to any person and whether the interest of Company is as owner,
lessee or otherwise; and
(b) All products and all proceeds of any and all of the foregoing,
and, to the extent not otherwise included, all payments under insurance (whether
or not the Agent is the loss payee thereof), and any indemnity, warranty or
guaranty, payable by reason of loss or damage to or otherwise with respect to
any of the foregoing;
provided, however, that any machinery and equipment purchased solely with
proceeds of indebtedness permitted under Section 5.2(a)(iv) of the Credit
Agreement shall not constitute Collateral so long as such Indebtedness is
outstanding.
1. Representations Warranties, Covenants and Agreements. The Company
further represents, warrants, covenants, and agrees with the Agent for the
benefit of the Banks as follows:
(a) Ownership of Collateral; Security Interest Priority. At the
time any Collateral becomes subject to a security interest of the Agent
hereunder, unless the Agent shall otherwise consent, the Company shall be deemed
to have represented and warranted that (i) the Company is the lawful owner of
such Collateral and has the right and authority to subject the same to the
security interest of the Agent; (ii) none of the Collateral is subject to any
Lien other than that in favor of the Agent, and (iii) there is no effective
financing statement covering any of the Collateral on file in any public office,
other than in favor of the Agent. This Security Agreement creates in favor of
the Agent a valid and perfected first-priority security interest in the
Collateral enforceable against the Company and all third parties and securing
the payment of the Secured Obligations, and all filings and other actions
necessary or desirable to create, preserve or perfect such security interests
have been duly taken.
(b) Location of Offices. Records and Facilities. The Company's chief
executive office and chief place of business and the office where the Company
keeps its records concerning its accounts, contract rights, chattel paper,
instruments, general intangibles and other obligations arising out of or in
connection with the sale or lease of goods or the rendering of services or
otherwise ("Receivables"), and all originals of all leases and other chattel
paper which evidence Receivables, are located in the State of Indiana, County of
▇▇▇▇▇▇▇, at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. The Company will provide
the Agent with prior written notice of any proposed change in the location of
its chief executive office and will not change the location of its chief
executive office without providing at least 20 days' prior written notice to the
Agent. The Company's only other offices and facilities are at the locations set
forth on Schedule 1(b) hereto. The Company will provide the Agent with prior
written notice of any change in the locations of its other offices and the
facilities. The tax identification number of the Company is ▇▇-▇▇▇▇▇▇▇. The name
of the Company is Casting Technology Company, and the Company operates under no
other name. The Company shall not change its name without providing at least 20
days' prior written notice to the Agent.
(c) Location of Machinery and Equipment. All Collateral
consisting of machinery or equipment will be located at the locations listed on
Schedule 1 (c) hereto, and at no other locations without the prior written
consent of the Agent. If the Collateral will be kept at leased locations or
warehoused, the Company will obtain appropriate landlord's lien waivers or
appropriate warehousemen's notices, each satisfactory to the Agent, unless
waived by the Agent.
(d) Liens, Etc. The Company will keep the Collateral free at
all times from any and all liens, security interests or encumbrances other than
those consented to in writing by the Agent. The Company will not, without the
prior written consent of the Agent, sell or lease, or permit or suffer to be
sold or leased, any of the Collateral except as permitted under the Credit
Agreement. The Agent or its attorneys may at any and all reasonable times
inspect the Collateral and for such purpose may enter upon any and all premises
where the Collateral is or might be kept or located.
(e) Insurance. The Company shall keep the Collateral insured
at all times against loss by theft, fire and other casualties. Said insurance
shall be issued by a company having a Best's insurance rating of B+ + or higher
and shall be in an amount normally maintained by companies of similar size and.
with respect to the Collateral, at least equal to the replacement value of the
Collateral. The policy or policies which evidence said insurance shall be
delivered to the Agent upon request, shall contain a loss payable clause in
favor of the Agent, shall name the Agent as an additional insured, as its
interest may appear, shall not permit amendment, cancellation or termination
without giving the Agent at least 30 days prior written notice thereof, and
shall otherwise be in form and substance reasonably satisfactory to the Agent.
Subject to the last two sentences of this paragraph 1(e), reimbursement under
any insurance maintained by the Company pursuant to this paragraph 1(e) may be
paid directly to the person who shall have incurred damage covered by such
insurance. In case of any loss involving loss to tangible Collateral when the
next succeeding sentence is not applicable, the Company shall make or cause to
be made the necessary repairs to or replacements of such tangible Collateral and
any proceeds of insurance maintained by the Company pursuant to this paragraph
1(e) shall be paid to the Company as reimbursement for the costs of such repairs
or replacements. Upon the occurrence and during the continuance of an Event of
Default or the actual or constructive total loss of any Collateral, all
insurance payments in respect of such Collateral shall be paid to and applied by
the Agent as specified in paragraph 3.
(f) Taxes, Etc. The Company will pay promptly, and within the
time that they can be paid without interest or penalty, any taxes, assessments
and similar imposts and charges, not being contested in good faith, which are
now or hereafter may become a lien, charge or encumbrance upon any of the
Collateral. If the Company fails to pay any such taxes, assessments or other
imposts or charges in accordance with this Section, the Agent shall have the
option to do so and the Company agrees to repay forthwith all amounts so
expended by the Agent with interest at the Overdue Rate.
(g) Further Assurances. The Company will do all acts and
things and will execute all financing statements and writings reasonably
requested by the Agent to establish, maintain and continue a perfected and valid
security interest of the Agent in the Collateral, and wig promptly on demand pay
all reasonable costs and expenses of filing and recording all instruments,
including the costs of any searches reasonably deemed necessary by the Agent to
establish and determine the validity and the priority of the Agent's security
interests (which searches the Agent shall conduct at least annually). A carbon,
photographic or other reproduction of this Security Agreement or any financing
statement covering the Collateral shall be sufficient as a financing statement.
(h) Maintenance of Collateral. The Company will cause the
Collateral to be maintained and preserved in the same condition, repair and
working order as when new, ordinary wear and tear excepted, and in accordance
with any manufacturer's manual, and shall forthwith, or, in the case of any loss
or damage to any of the Collateral as quickly as practicable after the
occurrence thereof, make or cause to be made all repairs, replacements, and
other improvements made in connection therewith which are necessary or desirable
to such end. The Company shall promptly furnish to the Agent a statement
respecting any loss or damage to any of the Collateral.
2. Events of Default. The occurrence of any Event of Default specified in
the Credit Agreement shall be deemed an event of default under this Security
Agreement.
3. Remedies. Upon the occurrence of any such event of default, but subject
to Section 6.3 of the Credit Agreement, the Agent shall have and may exercise
any one or more of the rights and remedies provided to it under this Security
Agreement or any of the other Operative Documents or provided by law, including
but not limited to all of the rights and remedies of a secured party under the
Uniform Commercial Code, and the Company hereby agrees to assemble the
Collateral and make it available to the Agent at a place to be designated by the
Agent which is reasonably convenient to both parties, authorizes the Agent to
take possession of the Collateral with or without demand and with or without
process of law and to sell and dispose of the same at public or private sale and
to apply the proceeds of such sale to the costs and expenses thereof (including
reasonable attorneys' fees and disbursements incurred by the Agent) and then to
the payment of the indebtedness and satisfaction of other Secured Obligations.
Any
requirement of reasonable notice shall be met if the Agent sends such notice to
the Company, by registered or certified mail, at least 5 days prior to the date
of sale, disposition or other event giving rise to a required notice. The Agent
may be the purchaser at any such sale. The Company expressly authorizes such
sale or sales of the Collateral in advance of and to the exclusion of any sale
or sales of or other realization upon any other collateral securing the Secured
Obligations. The Agent shall have no obligation to preserve rights against prior
parties. The Company hereby waives as to the Agent any right of subrogation or
marshalling of such Collateral and any other collateral for the Secured
Obligations. To this end, the Company hereby expressly agrees that any such
collateral or other security of the Company or any other party which the Agent
may hold, or which may come to any of them or any of their possession, may be
dealt with in all respects and particulars as though this Security Agreement
were not in existence. The parties hereto further agree that public sale of the
Collateral by auction conducted in any county in which any Collateral is located
or in which the Agent or the Company does business after advertisement of the
time and place thereof shall, among other manners of public and private sale, be
deemed to be a commercially reasonable disposition of the Collateral. The
Company shall be liable for any deficiency remaining after disposition of the
Collateral.
4. Special Remedies Concerning Certain Collateral.
(a) Upon the occurrence of any event of default hereunder, the
Company shall, if requested to do so in writing, and to the extent so requested
(i) promptly collect and enforce payment of all amounts due the Company on
account of, in payment of, or in connection with, any of the Collateral, (ii)
hold all payments in the form received by the Company as trustee for the Agent,
without commingling With any funds belonging to the Company, and (iii) forthwith
deliver all such payments to the Agent with endorsement to the Agent's order of
any checks or similar instruments.
(b) Upon the occurrence of any event of default hereunder, for
purposes of assisting the Agent in exercising its rights and remedies provided
to it under this Security Agreement, the Company (i) hereby irrevocably
constitutes and appoints the Agent its true and lawful attorney, for it and in
its name, place and stead, to collect, demand, receive, ▇▇▇ for, compromise, and
give good and sufficient releases for, any monies due or to become due on
account of, in payment of, or in connection with the Collateral, (ii) hereby
irrevocably authorizes the Agent to endorse the name of the Company upon any
checks, drafts, or similar items which are received in payment of, or in
connection with any of the Collateral, and to do all things necessary in order
to reduce the same to money, and (iii) with respect to any Collateral, hereby
irrevocably assents to all extensions or postponements of the time of payment
thereof or any other indulgence in connection therewith, to each substitution,
exchange or release of Collateral, to the addition or release of any party
primarily or secondarily liable, to the acceptance of partial
payments thereon and the settlement, compromise or adjustment (including
adjustment of insurance payments) thereof, all in such manner and at such time
or times as the Agent shall deem advisable. Notwithstanding any other provisions
of this Security Agreement, it is expressly understood and agreed that the Agent
shall have no duty or be obligated in any manner to make any demand or to make
any inquiry as to the nature or sufficiency of any payments received by it or to
present or file any claim or take any other action to collect or enforce the
payment of any amounts due or to become due on account of or in connection with
any of the Collateral.
5. Remedies Cumulative. No right or remedy conferred upon or reserved
to the Agent under any Operative Document is intended to be exclusive of any
other right or remedy, and every right and remedy shall be cumulative in
addition to every other right or remedy given hereunder or now or hereafter
existing under any applicable law. Every right and remedy of the Agent under any
Operative Document or under applicable law may be exercised from time to time
and as is often as may be deemed expedient by the Agent. To the extent that it
lawfully may, the Company agrees that it will not at any time insist upon,
plead, or in any manner whatever claim or take any benefit or advantage of any
applicable present or future stay, extension or moratorium law, which may effect
observance or performance of any provisions of any Operative Document; nor will
it claim, take or insist upon any benefit or advantage of any present or future
law providing for the valuation or appraisal of any security for its obligations
under any Operative Document prior to any sale or sales thereof which may be
made under or by virtue of any instrument governing the same; nor will it, after
any such sale or sales, claim or exercise any right under any applicable law to
redeem any portion of such security so sold.
6. Conduct No Waive. No waiver of default shall be effective unless in
writing executed by the Agent and consented to by each of the Banks and waiver
of any default or forbearance on the part of the Agent in enforcing any of its
rights under this Security Agreement shall not operate as a waiver of any other
default or of the same default on a future occasion or of such right,
7. Governing Law; Definitions. This Security Agreement is a contract
made under, and the rights and obligations of the parties hereunder shall be
governed by and construed in accordance with, the laws of the State of Michigan
applicable to contracts made and to be performed entirely within such State.
Terms used but not defined herein shall have the respective meaning ascribed
thereto in the Credit Agreement. Unless otherwise defined herein or in the
Credit Agreement, terms used in Article 9 of the Uniform Commercial Code in the
State of Michigan are used herein as therein defined on the date hereof. The
headings of the various subdivisions hereof are for convenience of reference
only and shall in no way modify any of the terms or provisions hereof.
8. Notices. All notices, demands, requests, consents and other
communications hereunder shall be delivered and shall be effective in the manner
specified in the Credit Agreement. All notices shall be deemed to have been
given at the time of actual delivery thereof to such address as specified in the
Credit Agreement, or if sent by the Agent to the Company by certified or
registered mail, postage prepaid, to such address, on the fifth day after
mailing.
9. Bights Not Construed as Duties. The powers conferred on the Agent
hereunder are solely to protect its interests in the Collateral and shall not
impose any duty upon it to exercise any such powers. Except for the safe custody
of any Collateral in its possession and accounting for monies actually received
by it hereunder, the Agent shall have no duty as to any Collateral or as to the
taking of any necessary steps to preserve rights against prior parties or any
other rights pertaining to any Collateral.
10. Amendments. None of the terms and provisions of this Security Agreement
may be modified or amended in any way except by an instrument in writing
executed by each of the parties hereto and consented to by each of the Banks.
11. Severability. If any one or more provisions of this Security Agreement
should be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected, impaired or prejudiced thereby.
12. Expenses. (a) The Company agrees to indemnity the Agent from and
against any and all claims, losses and liabilities growing out of or resulting
from this Security Agreement (including, without limitation, enforcement of this
Security Agreement), except claims, losses or liabilities resulting from the
Agent's gross negligence or willful misconduct.
(b) The Company will, upon demand, pay to the Agent an amount
of any and all reasonable expenses, including the reasonable fees and
disbursements of its counsel and of any experts and agents, which the Agent may
incur in connection with (1) the administration of this Security Agreement, (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 Agent hereunder, or (iv) the failure of
the Company to perform or observe any of the provisions hereof. The Company will
reimburse the Agent for all expenses, including attorneys' fees and
disbursements incurred by the Agent in seeking to collect the indebtedness and
other obligations secured hereby or any part thereof, in enforcing performance
of the Company's obligations under the Operative Documents, in defending the
Agent's security interests and the priority thereof, or in pursuing any of the
Agent's rights or remedies hereunder or under the Operative Documents.
13. Successors and Assigns; Termination. This Security Agreement shall
create a continuing security interest in the Collateral and shall (a) remain in
full force and effect until full payment and performance of the Secured
Obligations (b) be binding upon the Company, its successors and assigns and (c)
inure, together with the rights and remedies of the Agent hereunder. to the
benefit of the Agent and its successors, transferees and assigns. Upon the full
payment and performance of the Secured Obligations the security interests
granted hereby shall terminate and all rights to the Collateral shall revert to
the Company. Upon any such termination, the Agent will, at the Company's
expense, execute and deliver to the Company such documents as the Company shall
reasonably request to evidence such termination.
14. Waiver of Jury Trial. The Agent and the Banks. in accepting this
Security Agreement, and the Company, after consulting or having had the
opportunity to consult with counsel, knowingly, voluntarily and intentionally
waive any right any of them may have to a trial by jury in any litigation based
upon or arising out of this Security Agreement or any related instrument or
agreement or any of the transactions contemplated by this Security Agreement or
any course of conduct, dealing, statements (whether oral or written) or actions
of any of them. Neither the Agent and the Banks nor the Company shall, seek to
consolidate, by counterclaim or otherwise, any such action in which a jury trial
has been waived with any other action in which a jury trial cannot be or has not
been waived. These provisions shall not be deemed to have been modified in any
respect or relinquished by either the Agent and the Banks or the Company except
by a written instrument executed by all of them.
IN WITNESS WHEREOF, the Company has caused this Security Agreement to
be duly executed as of the day and year first set forth above.
CASTING TECHNOLOGY COMPANY
By: AMCAST CASTING TECHNOLOGIES,
INC., its General Partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇
Its: President
And By: IZUMI, INC., its General Partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇
Its: President
SCHEDULE 1(b) TO SECURITY AGREEMENT
List of Other Office and Facility Locations
Type of Office
or Facility Address City County State Zip
----------- ------- ---- ------ ----- ---
Casting Technology ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
Company Drive
SCHEDULE (1)(c) TO SECURITY
AGREEMENT
List of Machinery and Equipment Locations
Address City County State Zip
------- ---- ------ ----- ---
1450 Musicland ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ IN 46131
Drive