Exhibit 10.2
EXECUTION VERSION
“Notwithstanding anything herein to the contrary, the liens and security
interests granted to the Agent pursuant to this Agreement and the exercise of
any right or remedy by the Agent hereunder, are subject to the limitations and
provisions of the Intercreditor Agreement dated as of December 29, 2006 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Intercreditor Agreement”), among Bank of America, N.A., The Bank of New York
Mellon Trust Company, N.A. (formerly The Bank of New York Trust Company, N.A.),
Neenah Foundry Company and the Subsidiaries of Neenah Foundry Company party
thereto. In the event of any conflict between the terms of the Intercreditor
Agreement and the terms of this Agreement, the terms of the Intercreditor
Agreement shall govern”.
SECURITY AGREEMENT
     THIS SECURITY AGREEMENT (this “Agreement”) is made as of the 30th day of
September, 2008 by the undersigned Lien Grantor (the “Lien Grantor”) in favor of
The Bank of New York Mellon Trust Company, N.A. (formerly The Bank of New York
Trust Company, N.A.) for the benefit of the Secured Parties (as defined below).
Certain capitalized terms as used herein are defined in Section 1 hereof. Unless
otherwise defined herein, capitalized terms used herein and defined in the
Indenture (as defined below) shall be used herein as therein defined or, if not
defined in the Indenture, as defined in the Code (as defined below).
W I T N E S S E T H:
     WHEREAS, Neenah Foundry Company (the “Issuer”) and The Bank of New York
Mellon Trust Company, N.A. (formerly The Bank of New York Trust Company, N.A.),
as trustee and collateral agent (in such capacity, the “Agent”), have entered
into an Indenture, dated as of December 29, 2006 (as amended, restated,
supplemented or otherwise modified from time to time, the “Indenture”),
providing for the issuance of the 91/2% Senior Secured Notes due 2017 (“Notes”)
of the Issuer, all as contemplated therein (with the holders from time to time
of Notes being referred to herein as the “Noteholders” and, together with the
Agent, as the “Secured Parties”);
     WHEREAS, the Issuer, various financial institutions from time to time party
thereto and Bank of America, N.A., as administrative agent and collateral agent
(in such capacity, the “ABL Agent”), are party to and amended and restated loan
and security agreement, dated as of the date hereof (as so amended and restated
and as the same may be further amended, restated, supplemented or otherwise
modified from time to time, the “ABL Agreement”);
     WHEREAS, pursuant to the Note Guaranty, each Guarantor has jointly and
severally guaranteed to the Secured Parties the payment when due of all the
Obligations;
     WHEREAS, it is a condition precedent to the issuance of Notes by the Issuer
that the Lien Grantor shall have executed and delivered to the Agent this
Agreement;
     WHEREAS, the Lien Grantor will obtain benefits from the issuance of Notes
by the Issuer under the Indenture and, accordingly, desires to execute this
Agreement in order to satisfy the condition described in the preceding recital;

 

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     NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Definitions. As used in this Agreement:
     “ABL Agent” shall have the meaning provided to such term in the recitals
hereto.
     “ABL Agreement” shall have the meaning provided to such term in the
recitals hereto.
     “Account Debtor” shall have the meaning provided to such term in the ABL
Agreement as in effect on the date hereof.
     “Agreement” shall have the meaning provided to such term in the preamble.
     “Cash Collateral Account” shall have the meaning provided to such term in
Section 5.1.
     “Cash Distributions” shall mean dividends, interest and other distributions
and payments (including proceeds of liquidation, sale or other disposition) made
or received in cash upon or with respect to any Collateral.
     State of New York; provided that, if perfection or the effect of perfection
or non-perfection or the priority of any Lien granted hereunder on any
Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than New York, “Code” shall mean the Uniform Commercial Code
as in effect from time to time in such other jurisdiction for purposes of the
provisions hereof relating to such perfection, effect of perfection or
non-perfection or priority.
     “Collateral” shall mean all of the Property and interests in Property
described in Section 2 of this Agreement, and all other property that now or
hereafter secures the payment and performance of any of the Obligations.
     “Computer Hardware and Software” shall mean all of the Lien Grantor’s
rights (including rights as licensee and lessee) with respect to (i) computer
and other electronic data processing hardware, including all integrated computer
systems, central processing units, memory units, display terminals, printers,
computer elements, card readers, tape drives, hard and soft disk drives, cables,
electrical supply hardware, generators, power equalizers, accessories,
peripheral devices and other related computer hardware; (ii) all Software and
all software programs designed for use on the computers and electronic data
processing hardware described in clause (i) above, including all operating
system software, utilities and application programs in any form (source code and
object code in magnetic tape, disk or hard copy format or any other listings
whatsoever); (iii) any firmware associated with any of the foregoing; and
(iv) any documentation for hardware, Software and firmware described in clauses
(i), (ii) and (iii) above, including flow charts, logic diagrams, manuals,
specifications, training materials, charts and pseudo codes.
     “Environmental Laws” shall have the meaning provided to such term in the
ABL Agreement as in effect on the date hereof.
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     “Event of Default” shall have the meaning provided to such term in
Section 6.1.
     “Intellectual Property” shall have the meaning provided to such term in the
ABL Agreement as in effect on the date hereof.
     “Intellectual Property Mortgages” shall mean the Intellectual Property
Mortgages entered into between the Agent and the Lien Grantor in respect of the
Intellectual Property described therein for the purpose of establishing the
Agent’s Liens with respect to such Intellectual Property.
     “Lien Grantor” shall have the meaning provided to such term in the
preamble.
     “Liquid Investment” means a Permitted Investment (other than commercial
paper) that matures within 30 days after it is first included in the Collateral.
     “Mortgage” shall mean a mortgage creating the Lien on real property in
favor of the Agent for the benefit of the Secured Parties and with such changes
in the form thereof as the Agent shall request for the purpose of conforming to
local practice for similar instruments in the jurisdiction where such real
property is located.
     “Noteholders” shall have the meaning provided to such term in the recitals
hereto.
     “Noteholder Documents” shall mean, collectively, this Agreement, the
Indenture, the Note Guaranty, the Perfection Certificate and all other
agreements, instruments and documents now or hereafter executed and/or delivered
by the Lien Grantor to the Agent or any other Secured Party in order to evidence
or secure the Obligations, as each may be amended, restated, supplemented or
otherwise modified from time to time.
     “Notes” shall have the meaning provided to such term in the recitals
hereto.
     “Obligations” shall mean, as to the Lien Grantor, all principal of all
Notes outstanding from time to time, all interest on such Notes (including
Post-Petition Interest), all other obligations with respect to the Notes and all
other advances, debts, liabilities, obligations, covenants and duties arising,
due or payable from the Lien Grantor to the Agent or any other Secured Party of
any kind or nature, present or future, in each case arising under the Note
Guaranty, the Indenture or any of the other Noteholder Documents to which the
Lien Grantor is a party, whether direct or indirect (including those acquired by
assignment), absolute or contingent, primary or secondary, due or to become due,
now existing or hereafter arising and however acquired. The term includes,
without limitation, all interest, charges, expenses, fees, attorneys’ fees and
any other sums chargeable to the Lien Grantor under the Note Guaranty, this
Agreement or any of the other Noteholder Documents.
     “Perfection Certificate” shall mean a certificate substantially in the form
of Exhibit A hereto, completed and supplemented with the schedules contemplated
thereby to the satisfaction of the Agent, and signed by an officer of the Lien
Grantor.
     “Permitted Investments” shall mean investments in:
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  (a)   direct obligations of, or obligations the principal of and interest on
which are unconditionally guaranteed by, the United States (or by any agency
thereof to the extent such obligations are backed by the full faith and credit
of the United States), in each case maturing within one year from the date of
acquisition thereof;     (b)   commercial paper maturing within 270 days from
the date of acquisition thereof and having, at such date of acquisition, the
highest credit rating obtainable from S&P or from Moody’s;     (c)  
certificates of deposit, banker’s acceptances and time deposits maturing within
180 days from the date of acquisition thereof issued or guaranteed by or placed
with, and money market deposit accounts issued or offered by, any domestic
office of any commercial bank organized under the laws of the United States or
any State thereof which has a combined capital and surplus and undivided profits
of at least $500,000,000; and     (d)   fully collateralized repurchase
agreements with a term of not more than 30 days for securities described in
clause (a) above and entered into with a financial institution satisfying the
criteria described in clause (c) above.

     “Personal Property Collateral” shall mean all property included in the
Collateral except Real Property Collateral.
     “Property” shall mean any interest of the Lien Grantor in any kind of
property or asset, whether real, personal or mixed, or tangible or intangible.
     “Post-Petition Interest” shall mean any interest that accrues after the
commencement of any case, proceeding or other action relating to the bankruptcy,
insolvency or reorganization of the Lien Grantor (or would accrue but for the
operation of applicable bankruptcy or insolvency laws), whether or not such
interest is allowed or allowable as a claim in any such proceeding.
     “Real Property Collateral” shall mean all real Property included in the
Collateral.
     “Secured Parties” shall have the meaning provided to such term in the
recitals hereto.
     The foregoing definitions shall be equally applicable to the singular and
plural of the defined terms.
2. SECURITY INTEREST.
     2.1 Security Interest in Collateral. To secure the prompt payment and
performance to the Agent and each other Secured Party of the Obligations, the
Lien Grantor hereby grants to the Agent, for the benefit of the Secured Parties,
a continuing Lien upon all of the Lien Grantor’s assets, including all of the
following Property and interests in Property of the Lien Grantor, whether now
owned or existing or hereafter created, acquired or arising and wheresoever
located:
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  (a)   Accounts;     (b)   Certificated Securities;     (c)   Chattel Paper;  
  (d)   Computer Hardware and Software and all rights with respect thereto,
including, any and all 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;     (e)   Contract
Rights;     (f)   Deposit Accounts;     (g)   Documents;     (h)   Equipment;  
  (i)   Financial Assets;     (j)   Fixtures;     (k)   General Intangibles,
including Payment Intangibles and Software;     (l)   Goods (including all of
its Equipment, Fixtures and Inventory), and all accessions, additions,
attachments, improvements, substitutions and replacements thereto and therefor;
    (m)   Instruments;     (n)   Intellectual Property;     (o)   Inventory;    
(p)   Investment Property;     (q)   money (of every jurisdiction whatsoever);  
  (r)   Letter-of-Credit Rights;     (s)   Payment Intangibles;     (t)  
Security Entitlements;     (u)   Software;

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  (v)   Supporting Obligations;     (w)   Uncertificated Securities; and     (x)
  to the extent not included in the foregoing, all other personal property of
any kind or description;

together with all books, records, writings, data bases, information and other
property relating to, used or useful in connection with, or evidencing,
embodying, incorporating or referring to any of the foregoing, and all Proceeds,
products, offspring, rents, issues, profits and returns of and from any of the
foregoing; provided, that to the extent that the provisions of any lease,
license, contract, permit, Document or Instrument expressly prohibit (which
prohibition is enforceable under applicable law) any assignment thereof (unless
such prohibition specifically excludes from its scope an assignment for
collateral security purposes) or the grant of the Lien therein, (i) the Agent
will not enforce its Lien in the Lien Grantor’s rights under such lease,
license, contract, permit, Document or Instrument (other than in respect of the
Proceeds thereof) for so long as such prohibition continues, and (ii) to the
extent a violation of any such prohibition caused by the Lien under this
Section 2.1 would allow the counterparty to any such lease, license, contract,
permit, Document or Instrument to terminate the same under applicable law, then
such lease, license, contract, permit, Document or Instrument (other than in
respect of the Proceeds thereof) shall not constitute Collateral for so long as
such prohibition continues; it being understood that upon request of the Agent,
the Lien Grantor will in good faith use reasonable efforts to obtain consent for
the creation of the Lien in favor of the Agent (and to the Agent’s enforcement
of the Lien) in any lease, license, contract, permit, Document or Instrument
that prohibits any assignment thereof or the grant of the Lien therein; and
provided, further, that no Lien is granted in any “intent to use” trademark
applications until such time as a verified statement of use is filed.
     2.2 Other Collateral.
          2.2.1 Commercial Tort Claims. The Lien Grantor shall promptly notify
the Agent in writing upon having a Commercial Tort Claim that arises after the
Issue Date against any third party and, upon request of the Agent, promptly
enter into an amendment to this Agreement and do such other acts or things
reasonably deemed necessary by the Agent to give the Agent a security interest
in any such Commercial Tort Claim. The Lien Grantor represents and warrants that
as of the date of this Agreement, to its knowledge, it does not possess any
Commercial Tort Claims.
          2.2.2 Other Collateral. The Lien Grantor shall promptly (i) notify the
Agent in writing upon acquiring or otherwise obtaining any Collateral after the
date hereof that consists of Deposit Accounts, Investment Property or
Letter-of-Credit Rights in (or relating to) an amount in excess of $250,000 or
Electronic Chattel Paper in (or relating to) an amount in excess of $1,000,000
and, upon the request of the Agent, promptly execute such other documents, and
do such other acts or things deemed appropriate by the Agent to deliver to the
Agent control with respect to such Collateral; (ii) notify the Agent in writing
upon acquiring or otherwise obtaining any Collateral after the date hereof that
consists of Documents or Instruments in (or relating to) an amount in excess of
$250,000 and, upon the request of the Agent, will promptly execute such
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other documents, and do such other acts or things deemed appropriate by the
Agent to deliver to the Agent possession of such Documents which are negotiable
and Instruments, and, with respect to nonnegotiable Documents, to have such
nonnegotiable Documents issued in the name of the Agent; (iii) notify the Agent
in writing upon acquiring or otherwise obtaining any Collateral after the date
hereof that consists of motor vehicles and other Goods subject to a certificate
of title statute having an amount in excess of $250,000 and, upon the request of
the Agent, promptly deliver such certificates of title, execute such other
documents, and do such other acts or things deemed appropriate by the Agent to
cause the Agent to have a perfected security interest with respect to such
Collateral; and (iv) with respect to any Collateral having a value in excess of
$250,000 that is in the possession of a third party, other than Certificated
Securities and Goods covered by a Document, obtain an acknowledgement from the
third party that it is holding the Collateral for the benefit of the Agent.
          2.2.3 Lien Perfection; Further Assurances. The Lien Grantor shall
execute such instruments, assignments or documents as are necessary to perfect
the Agent’s Lien upon any of the Collateral and shall take such other action as
may be required to perfect or to continue the perfection of the Agent’s Lien
upon the Collateral. Unless prohibited by applicable law, the Lien Grantor
hereby authorizes the Agent to execute and file any such financing statement,
including, without limitation, financing statements that indicate the Collateral
(i) as all assets of the Lien Grantor or words of similar effect, or (ii) as
being of an equal or lesser scope, or with greater or lesser detail, than as set
forth in Section 2.1, on the Lien Grantor’s behalf. The Lien Grantor also hereby
ratifies its authorization for the Agent to have filed in any jurisdiction any
like financing statements or amendments thereto if filed prior to the date
hereof. The parties agree that a carbon, photographic or other reproduction of
this Agreement shall be sufficient as a financing statement and may be filed in
any appropriate office in lieu thereof. At the Agent’s request, the Lien Grantor
shall also promptly execute or cause to be executed and shall deliver to the
Agent any and all documents, instruments and agreements reasonably deemed
necessary by the Agent to give effect to or carry out the terms of the
Noteholder Documents.
3. REPRESENTATIONS AND WARRANTIES. The Lien Grantor represents and warrants
that:
     3.1 The Lien Grantor is duly organized, validly existing and in good
standing under the laws of the jurisdiction identified as its jurisdiction of
organization in the Perfection Certificate.
     3.2 The Lien Grantor has good and marketable title to all its Collateral
(subject to exceptions that are, in the aggregate, not material), free and clear
of any Liens other than Permitted Liens.
     3.3 The Lien Grantor has not performed any acts that might prevent the
Agent from enforcing any of the provisions of the Noteholder Documents or that
would limit the Agent in any such enforcement. No financing statement, security
agreement, mortgage or similar or equivalent document or instrument covering all
or part of the Collateral owned by the Lien Grantor is on file or of record in
any jurisdiction in which such filing or recording would be effective to perfect
or record the Lien on such Collateral, except financing statements, mortgages or
other similar or equivalent documents with respect to Permitted Liens. After the
Issue Date,
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no Collateral owned by the Lien Grantor will be in the possession or under the
control of any other Person having a claim thereto or security interest therein,
other than a Permitted Lien.
     3.4 The Agent’s Liens on all Personal Property Collateral owned by the Lien
Grantor (a) have been validly created, (b) will attach to each item of such
Collateral on the Issue Date (or, if the Lien Grantor first obtains rights
thereto on a later date, on such later date) and (c) when so attached, will
secure the Obligations.
     3.5 When the relevant Mortgages have been duly executed and delivered, the
Agent’s Liens on all Real Property Collateral owned by the Lien Grantor as of
the Issue Date granted thereunder will have been validly created and will secure
the Obligations. When such Mortgages have been duly recorded, the Liens will
rank prior to all other Liens (except Permitted Liens) on such Real Property
Collateral.
     3.6 The Lien Grantor has delivered the Perfection Certificate to the Agent.
The information set forth therein is correct and complete as of the Issue Date.
Within 60 days after the Issue Date, the Lien Grantor will furnish to the Agent
a file search report from each relevant UCC filing office listed in the
Perfection Certificate, showing the filing made at such filing office to perfect
the Agent’s Liens on the Collateral.
     3.7 When UCC financing statements describing the Collateral set forth in
Exhibit D to the Perfection Certificate have been filed in the offices specified
in such Perfection Certificate, the Agent’s Liens granted hereunder will
constitute perfected security interests in the Personal Property Collateral
owned by the Lien Grantor to the extent that a security interest therein may be
perfected by filing pursuant to the Code in such jurisdictions, prior to all
Liens and rights of others therein except Permitted Liens. Except for (a) the
filing of such UCC financing statements, (b) the filing of the Intellectual
Property Mortgages and (c) the due recordation of the Mortgages, no
registration, recordation or filing with any governmental body, agency or
official is required in connection with the execution or delivery of the
Noteholder Documents or is necessary for the validity or enforceability thereof
or for the perfection or due recordation of the Liens granted hereunder or for
the enforcement of the Liens.
4. COVENANTS. The Lien Grantor covenants and agrees as follows:
     4.1 Location of Collateral. All Collateral, other than Goods in transit,
motor vehicles, Goods in the possession of employees in the ordinary course of
business and other miscellaneous immaterial items of Collateral not having a
value that exceeds $250,000 in the aggregate for all Grantors (as defined in the
Intercreditor Agreement), will at all times be kept by the Lien Grantor, or a
bailee, distributor, consignee, warehousemen or similar party of the Lien
Grantor, at one or more of the business locations set forth in Exhibit B to the
Perfection Certificate, as updated by the Lien Grantor providing prior written
notice to the Agent of any new location.
     4.2 Insurance of Collateral.
          4.2.1 The Lien Grantor shall maintain and pay for insurance upon all
Collateral wherever located and with respect to the business of the Lien
Grantor, covering casualty, hazard, public liability, workers’ compensation,
business interruption and such other risks. Borrowers shall deliver certified
copies of such policies to the Agent as promptly as practicable, with
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satisfactory lender’s loss payable endorsements, naming the Agent (on behalf of
the Secured Parties) jointly with the ABL Agent as a loss payee, assignee or
additional insured, as appropriate, as its interest may appear, showing only
such other loss payees, assignees and additional insureds as are satisfactory to
the Agent and with respect to business interruption insurance, an executed
collateral assignment thereof. Each policy of insurance or endorsement shall
contain a clause requiring the insurer to give not less than 10 days’ prior
written notice to the Agent in the event of cancellation of the policy for
nonpayment of premium and not less than 30 days’ prior written notice to the
Agent in the event of cancellation of the policy for any other reason whatsoever
and a clause specifying that the interest of the Agent shall not be impaired or
invalidated by any act or neglect of the Lien Grantor or the owner of the
Property or by the occupation of the premises for purposes more hazardous than
are permitted by said policy. The Lien Grantor agrees to deliver to the Agent,
promptly as rendered, true copies of all reports made in any reporting forms to
insurance companies.
     4.3 Protection of Collateral. Neither the Agent nor any other Secured Party
shall be liable or responsible in any way for the safekeeping of any of the
Collateral or for any loss or damage thereto (except for reasonable care in the
custody thereof while any Collateral is in the Agent’s or such Secured Party’s
actual possession) or for any diminution in the value thereof, or for any act or
default of any warehouseman, carrier, forwarding agency, or other person
whomsoever, but the same shall be at the Lien Grantor’s sole risk.
     4.4 Administration of Accounts. The Lien Grantor shall keep accurate and
complete records of its Accounts and all payments and collections thereon.
     4.5 Inventory. The Lien Grantor shall keep accurate and complete records of
its Inventory.
     4.6 Equipment. The Lien Grantor shall keep its Equipment in good operating
condition and repair, reasonable wear and tear excepted; prevent any of its
material Equipment from becoming affixed to any real Property leased to the Lien
Grantor such that an interest arises therein under the real estate laws of the
applicable jurisdiction, unless the landlord of such real Property has executed
a landlord waiver or leasehold mortgage in favor of the Agent; and prevent any
of its material Equipment from becoming an accession to any personal Property
other than Equipment that is subject to first priority (except for Permitted
Liens) Liens in favor of the Agent. The Lien Grantor shall keep accurate records
itemizing and describing the kind, type, quantity and book value of its
Equipment and all dispositions thereof. Promptly after the reasonable request
therefor by the Agent, the Lien Grantor shall deliver to the Agent any and all
evidence of ownership, if any, of any of its Equipment.
5. CASH COLLATERAL ACCOUNT.
          5.1 The Agent will establish with respect to the Grantors (as defined
in the Intercreditor Agreement) an account (the “Cash Collateral Account”), in
the name and under the exclusive control of the Agent, into which all amounts
owned by the Grantors (as defined in the Intercreditor Agreement) that are to be
deposited therein pursuant to the Noteholder Documents shall be deposited from
time to time. The Cash Collateral Account will be operated as provided in this
Section 5.
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     5.2 The Agent shall deposit the following amounts, as and when received by
it, in the Cash Collateral Account:

  (a)   each amount required by Section 11.02 of the Indenture to be deposited
in a Cash Collateral Account with respect to any sale, lease, transfer or other
disposition by the Lien Grantor of Primary Collateral;     (b)   each amount
received by the Lien Grantor as Casualty Proceeds required by Section 11.02 of
the Indenture to be deposited in a Cash Collateral Account; and     (c)   each
amount realized or otherwise received by the Agent with respect to assets of the
Lien Grantor upon any exercise of remedies pursuant to any Noteholder Document.

The Agent shall maintain such records and/or establish such sub-accounts as
shall be required to enable it to identify the amounts held in each Cash
Collateral Account from time to time pursuant to preceding clauses (a), (b) or
(c), as applicable. The Agent shall withdraw and apply amounts from the Cash
Collateral Account as provided in the Indenture.
     5.3 All Cash Distributions received with respect to assets held in the Cash
Collateral Account shall be deposited therein promptly upon receipt thereof.
     5.4 Funds held in the Cash Collateral Account may, until withdrawn, be
invested and reinvested in such Liquid Investments as the Lien Grantor shall
request in writing from time to time.
     5.5 If an Event of Default shall have occurred and be continuing, the Agent
may (a) liquidate any or all investments held in the Cash Collateral Account
and/or (b) withdraw any amounts held therein and apply such amounts as provided
in Section 6.10 of the Indenture.
     5.6 If immediately available cash on deposit in any Collateral Account is
not sufficient to make any distribution or withdrawal to be made pursuant
hereto, the Agent will cause to be liquidated, as promptly as practicable, such
investments held in or credited to the Cash Collateral Account as shall be
required to obtain sufficient cash to make such distribution or withdrawal and,
notwithstanding any other provision hereof, such distribution or withdrawal
shall not be made until such liquidation has taken place.
6. DEFAULTS; RIGHTS AND REMEDIES ON DEFAULT.
     6.1 Event of Default. Each of the following occurrences shall constitute a
default under this Agreement (each, an “Event of Default”):

  (a)   Breach of Indenture. The occurrence of any Event of Default under the
Indenture; or

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    (b)   Breach under Noteholder Documents. The Lien Grantor’s failure to pay
when due any Obligations, or the occurrence of any breach of the terms and
conditions contained in any Noteholder Document.

     6.2 Remedies. Upon the occurrence and during the continuance of an Event of
Default, the Agent shall have and may upon direction of the other Secured
Parties exercise from time to time the following other rights and remedies,
provided, however, that it shall be under no obligation to so exercise:

  (a)   All of the rights and remedies of a secured party under the Code or
under other applicable law, and all other legal and equitable rights to which
the Agent or the other Secured Parties may be entitled, all of which rights and
remedies shall be cumulative and shall be in addition to any other rights or
remedies contained in this Agreement or any of the other Noteholder Documents,
and none of which shall be exclusive.     (b)   The right to take immediate
possession of the Collateral, and to (i) require the Lien Grantor to assemble
the Collateral, at the Lien Grantor’s expense, and make it available to the
Agent at a place designated by the Agent which is reasonably convenient to both
parties, and (ii) enter any premises where any of the Collateral shall be
located and to keep and store the Collateral on said premises until sold (and if
said premises be the Property of the Lien Grantor, the Lien Grantor agrees not
to charge the Agent for storage thereof).     (c)   The right to sell or
otherwise dispose of all or any Collateral in its then condition, or after any
further manufacturing or processing thereof, at public or private sale or sales,
with such notice as may be required by law, in lots or in bulk, for cash or on
credit, all as the Agent, in its sole discretion, may deem advisable. The Agent
may, at the Agent’s option, disclaim any and all warranties regarding the
Collateral in connection with any such sale. The Lien Grantor agrees that
10 days’ written notice to the Lien Grantor of any public or private sale or
other disposition of Collateral shall be reasonable notice thereof, and such
sale shall be at such locations as the Agent may designate in said notice. The
Agent shall have the right to conduct such sales on the Lien Grantor’s premises,
without charge therefor, and such sales may be adjourned from time to time in
accordance with applicable law. The Agent shall have the right to sell, lease or
otherwise dispose of the Collateral, or any part thereof, for cash, credit or
any combination thereof, and the Agent, on behalf of the Secured Parties, may
purchase all or any part of the Collateral at public or, if permitted by law,
private sale and, in lieu of actual payment of such purchase price, may set off
the amount of such price against the Obligations. The proceeds realized from the
sale of any Collateral shall be applied in a manner that is consistent with the
terms of the Indenture. If any deficiency shall arise, the Lien Grantor shall
remain liable to the Agent and the other Secured Parties

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      therefor. Any surplus shall be remitted to whomsoever shall be legally
entitled to the same.     (d)   The Agent is hereby granted a non-exclusive
license or other right to use, without charge, effective upon the occurrence and
continuance of an Event of Default, the Lien Grantor’s labels, patents,
copyrights, licenses, rights of use of any name, trade secrets, tradenames,
trademarks and advertising matter, or any Property of a similar nature, as it
pertains to the Collateral, in completing, advertising for sale and selling any
Collateral and the Lien Grantor’s rights under all licenses and all franchise
agreements shall inure to the Agent’s benefit.

     6.3 Remedies Cumulative; No Waiver. All covenants, conditions, provisions,
warranties, guaranties, indemnities, and other undertakings of the Lien Grantor
contained in this Agreement and the other Noteholder Documents, or in any
document referred to herein or contained in any agreement supplementary hereto
or in any schedule or in the Note Guaranty, given to the Agent or any other
Secured Party or contained in any other agreement between any Secured Party and
the Lien Grantor or between the Agent and the Lien Grantor heretofore,
concurrently, or hereafter entered into, shall be deemed cumulative to and not
in derogation or substitution of any of the terms, covenants, conditions, or
agreements of the Lien Grantor herein contained. The failure or delay of the
Agent or any other Secured Party to require strict performance by the Lien
Grantor of any provision of this Agreement or to exercise or enforce any rights,
Liens, powers, or remedies hereunder or under any of the aforesaid agreements or
other documents or security or Collateral shall not operate as a waiver of such
performance, Liens, rights, powers and remedies, but all such requirements,
Liens, rights, powers, and remedies shall continue in full force and effect
until all Obligations owing or to become owing from the Lien Grantor to the
Agent and each other Secured Party have been fully satisfied. None of the
undertakings, agreements, warranties, covenants and representations of the Lien
Grantor contained in this Agreement or any of the other Noteholder Documents and
no Default or Event of Default by the Lien Grantor under this Agreement or any
other Noteholder Document shall be deemed to have been suspended or waived by
the Secured Parties, unless such suspension or waiver is by an instrument in
writing specifying such suspension or waiver and is signed by a duly authorized
representative of the Agent and directed to the Lien Grantor.
7. MISCELLANEOUS.
     7.1 Power of Attorney. The Lien Grantor hereby irrevocably designates,
makes, constitutes and appoints the Agent (and all Persons designated by the
Agent) as the Lien Grantor’s true and lawful attorney (and agent-in-fact),
solely with respect to the matters set forth in this Section 7.1, and the Agent,
or the Agent’s agent, may, without notice to the Lien Grantor and in the Lien
Grantor’s or the Agent’s name, but at the cost and expense of the Lien Grantor:
          7.1.1 At such time or times as the Agent, in its sole discretion, may
determine, endorse the Lien Grantor’s name on any checks, notes, acceptances,
drafts, money orders or any other evidence of payment or proceeds of the
Collateral which come into the possession of the Agent or under the Agent’s
control.
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          7.1.2 At such time or times after the occurrence and during the
continuance of an Event of Default (provided that the occurrence of an Event of
Default shall not be required with respect to clauses (iv), (vi) (except as set
forth below in such clause (vi)), (viii) and (ix) below), as the Agent or its
agent in its sole discretion may determine: (i) demand payment of the Accounts
from the Account Debtors, enforce payment of the Accounts by legal proceedings
or otherwise, and generally exercise all of the Lien Grantors’ rights and
remedies with respect to the collection of the Accounts; (ii) settle, adjust,
compromise, discharge or release any of the Accounts or other Collateral or any
legal proceedings brought to collect any of the Accounts or other Collateral;
(iii) sell or assign any of the Accounts and other Collateral upon such terms,
for such amounts and at such time or times as the Agent deems advisable, and at
the Agent’s option, with all warranties regarding the Collateral disclaimed;
(iv) take control, in any manner, of any item of payment or proceeds relating to
any Collateral; (v) prepare, file and sign the Lien Grantor’s name to a proof of
claim in bankruptcy or similar document against any Account Debtor or to any
notice of lien, assignment or satisfaction of lien or similar document in
connection with any of the Collateral; (vi) receive, open and dispose of all
mail addressed to the Lien Grantor and, if an Event of Default has occurred and
is continuing, notify postal authorities to change the address for delivery
thereof to such address as the Agent may designate until such time as no Event
of Default exists; provided, that any contents of such mail other than any
checks, notes, acceptances, drafts, money orders or other evidence of payment or
proceeds of the Collateral shall be furnished by the Agent to the Lien Grantor
in accordance with written instructions provided by the Lien Grantor;
(vii) endorse the name of any Lien Grantor upon any of the items of payment or
proceeds relating to any Collateral and deposit the same to the account of the
Agent on account of the Obligations; (viii) endorse the name of the Lien Grantor
upon any chattel paper, document, instrument, invoice, freight bill, bill of
lading or similar document or agreement relating to any Collateral; (ix) use the
Lien Grantor’s stationery and sign the name of the Lien Grantor to verifications
of the Accounts and notices thereof to Account Debtors (provided that the Agent
shall deliver drafts of any such written communication to the Lien Grantor prior
to the delivery thereof to any Account Debtors); (x) use the information
recorded on or contained in any data processing equipment and Computer Hardware
and Software relating to the Accounts, Inventory, Equipment and any other
Collateral; (xi) make and adjust claims under policies of insurance to the
extent related to the Collateral; and (xii) do all other acts and things
necessary, to fulfill the Lien Grantor’s obligations under this Agreement.
          7.1.3 The power of attorney granted hereby shall constitute a power
coupled with an interest and shall be irrevocable.
     7.2 Indemnity. The Lien Grantor jointly and severally hereby agrees to
indemnify the Agent and each other Secured Party (and each of their Affiliates)
and hold the Agent and each other Secured Party (and each of their Affiliates)
harmless from and against any liability, loss, damage, claim, suit, action or
proceeding suffered or incurred by any such Person (including reasonable
documented attorneys fees and legal expenses) as the result of the Lien
Grantor’s failure to observe, perform or discharge the Lien Grantor’s duties
hereunder, except those determined by a court of competent jurisdiction in a
final nonappealable judgment to have been caused by the gross negligence or
willful misconduct of the Agent or such Secured Party. In addition, the Lien
Grantor shall defend the Agent and each other Secured Party (and each of their
Affiliates) against and hold them harmless from all claims of any Person with
respect to the Collateral (except those resulting from the bad faith, gross
negligence or intentional misconduct
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of any such Person). Without limiting the generality of the foregoing, the Lien
Grantor shall indemnify and hold harmless the Agent and each other Secured Party
(and each of their Affiliates) from and against any loss, damage, cost, expense
or liability directly or indirectly arising out of or under Environmental Laws,
or attributable to the use, generation, storage, release, threatened release,
discharge, disposal or presence of any pollutants, flammables, explosives,
petroleum (including crude oil) or any fraction thereof, radioactive materials,
hazardous wastes, toxic substances or related materials, including, without
limitation, any substances defined as or included in the definition of toxic or
hazardous substances, wastes, or materials under any Environmental Law, except
for those losses, damages, costs, expenses or liabilities determined by a court
of competent jurisdiction in a final nonappealable judgment to have been caused
by the gross negligence or willful misconduct of the Agent or such Secured
Party. Notwithstanding any contrary provision in this Agreement, the obligation
of the Lien Grantor under this Section 7.2 shall survive the payment in full of
the non-indemnity Obligations and the termination of this Agreement.
     7.3 Complete Agreement; Sale of Interest.

  (a)   The Noteholder Documents constitute the complete agreement among the
parties with respect to the subject matter hereof and may not be modified,
altered or amended, except by an agreement in writing signed by the Lien Grantor
and the Agent. The Lien Grantor may not sell, assign or transfer any interest in
this Agreement or any of the other Noteholder Documents, or any of the
Obligations or any portion thereof, including, without limitation, the Lien
Grantor’s rights, title, interests, remedies, powers and duties hereunder or
thereunder.     (b)   The Lien Grantor hereby consents to any Secured Party’s
participation, sale, assignment, transfer or other disposition, at any time or
times hereafter, of this Agreement, the Notes, any of the other Noteholder
Documents or any of the Obligations, or of any portion hereof or thereof,
including, without limitation, such Secured Party’s rights, title, interests,
remedies, powers and duties hereunder or thereunder, subject to the conditions
set forth in the Indenture.

     7.4 Modification of Agreement. No amendment, modification or waiver of any
provision of this Agreement nor consent to any departure by the Lien Grantor
herefrom, shall in any event be effective unless the same shall be in writing
and signed by the Agent and the Lien Grantor, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.
     7.5 Reimbursement of Expenses. If, at any time or times regardless of
whether or not an Event of Default then exists, (i) the Agent incurs reasonable
and documented legal or accounting expenses or any other costs or out-of-pocket
expenses in connection with (1) the negotiation and preparation of this
Agreement or any of the other Noteholder Documents, any amendment of or
modification of this Agreement or any of the other Noteholder Documents or
(2) the administration of this Agreement or any of the other Noteholder
Documents and the transactions contemplated hereby and thereby; or (ii) the
Agent or any other Secured Party incurs
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reasonable and documented legal or accounting expenses or any other costs or
out-of-pocket expenses in connection with (1) any litigation, contest, dispute,
suit, proceeding or action (whether instituted by the Agent, any other Secured
Party, any Lien Grantor or any other Person) relating to the Collateral, this
Agreement or any of the other Noteholder Documents or the Lien Grantor’s
affairs; (2) any attempt to enforce any rights of the Agent or any other Secured
Party against the Lien Grantor or any other Person which may be obligated to the
Agent or any other Secured Party by virtue of this Agreement or any of the other
Noteholder Documents, including, without limitation, the Account Debtors; or
(3) any attempt to inspect, verify, protect, preserve, restore, collect, sell,
liquidate or otherwise dispose of or realize upon the Collateral; then all such
legal and accounting expenses, other costs and out of pocket expenses of the
Agent or any other Secured Party, as applicable, shall be charged to the Lien
Grantors; provided, that the Lien Grantor shall not be responsible for such
expenses, costs and out-of-pocket expenses to the extent incurred because of the
gross negligence, bad faith or willful misconduct of the Agent or such Secured
Party. All amounts chargeable to the Lien Grantor under this Section 7.5 shall
be Obligations secured by all of the Collateral, shall be payable within 15 days
following demand to the Agent or such other Secured Party, as the case may be,
and shall bear interest from the date due and owing until paid in full at the
rate applicable to the Notes. The Lien Grantor shall also reimburse the Agent
for expenses incurred by the Agent in its administration of the Collateral to
the extent and in the manner provided in the Indenture.
     7.6 Perfection by Possession or Control. With respect to any provision in
this Agreement which requires the Lien Grantor to deliver possession of any
negotiable document, instrument, certificated securities, promissory notes or
other Collateral requiring possession thereof in order to perfect the security
interest of the Agent therein under the Code, or which requires the Agent to
have “control” (as defined in the Code) of investment property or deposit
accounts, in order to perfect the security interest of the Agent therein, until
the Discharge of the Bank Obligations (as defined in the Intercreditor
Agreement) has occurred, no such delivery to the Agent shall be required to the
extent such Collateral is delivered to the Bank Agent (as defined in the
Intercreditor Agreement) in accordance with the Bank Documents (as defined in
the Intercreditor Agreement), it being understood that the Bank Agent is acting
as non-fiduciary agent for the benefit of the Agent solely for the purpose of
perfecting the security interest in such Collateral pursuant to the terms of the
Intercreditor Agreement.
     7.7 Severability. Wherever possible, each provision of this Agreement shall
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
     7.8 Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the successors and assigns of the Lien Grantor, the Agent and
each other Secured Party.
     7.9 Notice. Except as otherwise provided herein, all notices, requests and
demands to or upon a party hereto, to be effective, shall be in writing, return
receipt requested, by personal delivery against receipt, by overnight courier or
by facsimile and, unless otherwise expressly provided herein, shall be deemed to
have been validly served, given, delivered or received, as
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applicable, immediately when delivered against receipt, one Business Day after
deposit with an overnight courier or, in the case of facsimile notice, when
sent, addressed as follows:

         
 
  If to the Agent:   The Bank of New York Mellon Trust Company, N.A.
2 North LaSalle Street
Suite 1020
Chicago, IL 60602
Attention: Corporate Trust Administration
Fax No.: (312) 827-8542
 
       
 
  If to the Lien Grantor:   c/o Neenah Foundry Company
2121 Brooks Avenue
Neenah, Wisconsin 54957
Attention: Mr. Gary LaChey
Fax No.: (920) 729-3633
 
       
 
  With a copy to:   Quarles & Brady LLP
411 East Wisconsin Avenue
Milwaukee, Wisconsin 53202-4497
Attention: Andrew M. Barnes, Esq.
Fax No.: (411) 277-5105

or to such other address as each party may designate for itself by notice given
in accordance with this Section 7.9.
     7.10 Release; Termination.
          7.10.1 Upon any sale, lease, transfer or other disposition of any item
of Collateral that is consummated in compliance with the Indenture, the Agent
shall execute and deliver such documents that the Lien Grantor may reasonably
request to evidence the release of any such item of Collateral from the security
interests granted hereunder.
          7.10.2 Upon the maturity of the Notes and payment in full of all
Obligations (other than contingent indemnity obligations), the security
interests granted hereunder shall terminate and all rights to the Collateral
shall revert back to the Lien Grantor. Upon such termination, the Agent shall
execute and deliver such documents that the Lien Grantor may reasonably request
to evidence such termination.
     7.11 Interpretation. No provision of this Agreement or any of the other
Noteholder Documents shall be construed against or interpreted to the
disadvantage of any party hereto by any court or other governmental or judicial
authority by reason of such party having or being deemed to have been
structured, drafted or dictated such provision.
     7.12 Governing Law; Consent to Forum. THIS AGREEMENT HAS BEEN NEGOTIATED,
EXECUTED AND DELIVERED IN AND SHALL BE DEEMED TO HAVE BEEN MADE IN NEW YORK, NEW
YORK. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE
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OF NEW YORK (WITHOUT REGARD TO ANY PRINCIPLES OF CONFLICTS OF LAWS); PROVIDED,
HOWEVER, THAT IF ANY OF THE COLLATERAL SHALL BE LOCATED IN ANY JURISDICTION
OTHER THAN NEW YORK, THE LAWS OF SUCH JURISDICTION SHALL GOVERN THE METHOD,
MANNER AND PROCEDURE FOR FORECLOSURE OF THE AGENT’S LIEN UPON SUCH COLLATERAL
AND THE ENFORCEMENT OF THE AGENT’S OTHER REMEDIES IN RESPECT OF SUCH COLLATERAL
TO THE EXTENT THAT THE LAWS OF SUCH JURISDICTION ARE DIFFERENT FROM OR
INCONSISTENT WITH THE LAWS OF NEW YORK. AS PART OF THE CONSIDERATION FOR NEW
VALUE RECEIVED, AND REGARDLESS OF ANY PRESENT OR FUTURE DOMICILE OR PRINCIPAL
PLACE OF BUSINESS OF THE LIEN GRANTOR, THE AGENT OR ANY OTHER SECURED PARTY, THE
LIEN GRANTOR HEREBY CONSENTS AND AGREES THAT THE COURTS OF THE STATE OF NEW
YORK, SITTING IN THE BOROUGH OF MANHATTAN, CITY OF NEW YORK, OR, AT THE AGENT’S
OPTION, THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK,
SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES
BETWEEN THE LIEN GRANTOR ON THE ONE HAND AND THE AGENT OR ANY OTHER SECURED
PARTY ON THE OTHER HAND PERTAINING TO THIS AGREEMENT OR TO ANY MATTER ARISING
OUT OF OR RELATED TO THIS AGREEMENT. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN
ANY AGREEMENT TO WHICH THE LIEN GRANTOR IS A PARTY, THE LIEN GRANTOR EXPRESSLY
SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT
COMMENCED IN ANY SUCH COURT, AND THE LIEN GRANTOR HEREBY WAIVES ANY OBJECTION
WHICH THE LIEN GRANTOR MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION,
IMPROPER VENUE OR FORUM NON CONVENIENS. THE LIEN GRANTOR HEREBY WAIVES PERSONAL
SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR
SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE
MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO THE LIEN GRANTOR AT THE
ADDRESS SET FORTH IN THIS AGREEMENT OR OTHERWISE PROVIDED TO THE AGENT AS A NEW
NOTICE ADDRESS IN ACCORDANCE WITH THE TERMS HEREOF AND THAT SERVICE SO MADE
SHALL BE DEEMED COMPLETED UPON THE EARLIER OF THE LIEN GRANTOR’S ACTUAL RECEIPT
THEREOF OR FIVE (5) BUSINESS DAYS AFTER DEPOSIT IN THE U.S. MAILS, PROPER
POSTAGE PREPAID. NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO AFFECT
THE RIGHT OF THE AGENT OR ANY OTHER SECURED PARTY TO SERVE LEGAL PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW, OR TO PRECLUDE THE ENFORCEMENT BY THE AGENT OR
ANY OTHER SECURED PARTY OF ANY JUDGMENT OR ORDER OBTAINED IN SUCH FORUM OR THE
TAKING OF ANY ACTION UNDER THIS AGREEMENT TO ENFORCE SAME IN ANY OTHER
APPROPRIATE FORUM OR JURISDICTION.
     7.13 Waivers. THE LIEN GRANTOR IRREVOCABLY WAIVES (A) THE RIGHT TO TRIAL BY
JURY (WHICH THE AGENT HEREBY ALSO WAIVES) IN ANY ACTION, SUIT, PROCEEDING OF
COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED TO THIS AGREEMENT, OR ANY OF
THE OTHER NOTEHOLDER DOCUMENTS, THE OBLIGATIONS OR THE COLLATERAL;
(B) PRESENTMENT,
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DEMAND AND PROTEST AND NOTICE OF PRESENTMENT, PROTEST, DEFAULT, NON PAYMENT,
MATURITY, RELEASE, COMPROMISE, SETTLEMENT, EXTENSION OR RENEWAL OF ANY OR ALL
COMMERCIAL PAPER, ACCOUNTS, CONTRACT RIGHTS, DOCUMENTS, INSTRUMENTS, CHATTEL
PAPER AND GUARANTIES AT ANY TIME HELD BY THE AGENT OR ANY OTHER SECURED PARTY,
ON WHICH THE LIEN GRANTOR MAY IN ANY WAY BE LIABLE AND HEREBY RATIFIES AND
CONFIRMS WHATEVER THE AGENT OR ANY LENDER MAY DO IN THIS REGARD; (C) NOTICE
PRIOR TO TAKING POSSESSION OR CONTROL OF THE COLLATERAL OR ANY BOND OR SECURITY
WHICH MIGHT BE REQUIRED BY ANY COURT PRIOR TO ALLOWING THE AGENT TO EXERCISE ANY
REMEDIES HEREUNDER; (D) THE BENEFIT OF ALL VALUATION, APPRAISEMENT AND EXEMPTION
LAWS AND (E) NOTICE OF ACCEPTANCE HEREOF. THE LIEN GRANTOR ACKNOWLEDGES THAT THE
FOREGOING WAIVERS ARE A MATERIAL INDUCEMENT TO THE AGENT’S ENTERING INTO THIS
AGREEMENT AND THAT THE AGENT IS RELYING UPON THE FOREGOING WAIVERS IN ITS FUTURE
DEALINGS WITH THE LIEN GRANTOR. THE LIEN GRANTOR WARRANTS AND REPRESENTS THAT IT
HAS REVIEWED THE FOREGOING WAIVERS WITH ITS LEGAL COUNSEL AND HAS KNOWINGLY AND
VOLUNTARILY WAIVED ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.
     7.14 Incorporation by Reference. In connection with its appointment and
acting hereunder the Agent is entitled to all rights, privileges, immunities,
protections, benefits and indemnities provided to it as Trustee under the
Indenture.
     7.15 Force Majeure. In no event shall the Agent be responsible or liable
for any failure or delay in the performance of its obligations hereunder arising
out of or caused by, directly or indirectly, forces beyond its control,
including, without limitation, strikes, work stoppages, accidents, acts of war
or terrorism, civil or military disturbances, nuclear or natural catastrophes or
acts of God, and interruptions, loss or malfunctions of utilities,
communications or computer (software and hardware) services; it being understood
that the Agent shall use reasonable efforts which are consistent with accepted
practices in the banking industry to resume performance as soon as practicable
under the circumstances.
     7.16 Limitation on Duty of Agent in Respect of Collateral;

  (a)   Beyond the exercise of reasonable care in the custody thereof, the Agent
shall have no duty as to any Collateral in its possession or control or in the
possession or control of any agent or bailee or any income thereon or as to
preservation of rights against prior parties or any other rights pertaining
thereto and the Agent shall not be responsible for filing any financing or
continuation statements or recording any documents or instruments in any public
office at any time or times or otherwise perfecting or maintaining the
perfection of any security interest in the Collateral. The Agent shall be deemed
to have exercised reasonable care in the custody of the Collateral in its
possession if the Collateral is accorded treatment substantially equal to that
which it accords its own property and shall not be liable or

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      responsible for any loss or diminution in the value of any of the
Collateral, by reason of the act or omission of any carrier, forwarding agency
or other agent or bailee selected by the Agent in good faith.     (b)   The
Agent shall not be responsible for the existence, genuineness or value of any of
the Collateral or for the validity, perfection, priority or enforceability of
the Liens granted in any of the Collateral, whether impaired by operation of law
or by reason of any of any action or omission to act on its part hereunder,
except to the extent such action or omission constitutes gross negligence, bad
faith or willful misconduct on the part of the Agent, for the validity or
sufficiency of the Collateral or any agreement or assignment contained therein,
for the validity of the title of the Lien Grantor to the Collateral, for
insuring the Collateral or for the payment of taxes, charges, assessments or
Liens upon the Collateral or otherwise as to the maintenance of the Collateral.
    (c)   Notwithstanding anything in this Agreement to the contrary and for the
avoidance of doubt, the Agent shall have no duty to act outside of the United
States in respect of any Collateral located in any jurisdiction other than the
United States.     (d)   The Lien Grantor agree to record and file, at their own
expense, financing statements (and continuation statements when applicable) with
respect to the Collateral now existing or hereafter created meeting the
requirements of applicable state law in such manner and in such jurisdictions as
are necessary to perfect, and maintain perfected the security interests in the
Collateral created hereunder and under the other Noteholder Documents, and to
deliver a file stamped copy of each such financing statement or other evidence
of filing to the Agent promptly thearafter. The Agent shall be under no
obligation whatsoever to file such financing statements or continuation
statements or to make any other filing under the Code.

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     IN WITNESS WHEREOF, this Agreement has been duly executed on the day and
year specified at the beginning hereof.

                  The Bank of New York Mellon Trust Company, N.A., as Agent  
Morgan’s Welding, Inc., Lien Grantor    
 
               
By:
  /s/ Roxane Ellwanger
 
Roxane J. Ellwanger   By:   /s/ Jeffrey S. Jenkins
 
Jeffrey S. Jenkins    
 
  Assistant Vice President       Corporate Vice President-Finance and
Interim Chief Financial Officer    

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