awcsecurityagree2.htm


  
    
EXHIBIT
10.5


      

        
        

        SECURITY
AGREEMENT: SECURITIES ACCOUNT

        


        


        1.             
GRANT OF SECURITY INTEREST.  For valuable consideration, the
undersigned AMERICAN WOODMARK CORPORATION, a Virginia corporation ("Debtor"),
hereby grants and transfers to WELLS FARGO BANK, NATIONAL ASSOCIATION ("Bank") a
security interest in (a) Debtor's account no. 13146782 (whether held in Debtor's
name or as a Bank collateral account for the benefit of Debtor), any sub-account
thereunder or consolidated therewith, and all replacements or substitutions
therefor, including any account resulting from a renumbering or other
administrative re-identification thereof (collectively, the "Securities
Account") maintained with Wells Fargo Securities, LLC ("Intermediary"),
(b) all financial assets credited to the Securities Account, (c) all
security entitlements with respect to the financial assets credited to the
Securities Account, and (d) any and all other investment property or assets
maintained or recorded in the Securities Account (with all the foregoing defined
as "Collateral"), together with whatever is receivable or received when any of
the Collateral or proceeds thereof are sold, collected, exchanged or otherwise
disposed of, whether such disposition is voluntary or involuntary, including
without limitation, (i) all rights to payment, including returned premiums, with
respect to any insurance relating to any of the foregoing, (ii) all rights to
payment with respect to any claim or cause of action affecting or relating to
any of the foregoing, and (iii) all stock rights, rights to subscribe,
stock splits, liquidating dividends, cash dividends, dividends paid in stock,
new securities or other property of any kind which Debtor is or may hereafter be
entitled to receive on account of any securities pledged hereunder, including
without limitation, stock received by Debtor due to stock splits or dividends
paid in stock or sums paid upon or in respect of any securities pledged
hereunder upon the liquidation or dissolution of the issuer thereof (hereinafter
called "Proceeds").  Except as otherwise expressly permitted herein,
in the event Debtor receives any such Proceeds, Debtor will hold the same in
trust on behalf of and for the benefit of Bank and will immediately deliver all
such Proceeds to Bank in the exact form received, with the endorsement of Debtor
if necessary and/or appropriate undated stock powers duly executed in blank, to
be held by Bank as part of the Collateral, subject to all terms
hereof.  As used herein, the terms "security entitlement," "financial
asset" and "investment property" shall have the respective meanings set forth in
the Virginia Uniform Commercial Code.

        


        2.             
OBLIGATIONS SECURED.  The obligations secured hereby are the payment
and performance of:  (a) all present and future Indebtedness of Debtor
to Bank; (b) all obligations of Debtor under this Agreement; and (c) all present
and future obligations of Debtor to Bank of other kinds.  The word
"Indebtedness" is used herein in its most comprehensive sense and includes any
and all advances, debts, obligations and liabilities of Debtor, or any of them,
heretofore, now or hereafter made, incurred or created, whether voluntary or
involuntary and however arising, whether due or not due, absolute or contingent,
liquidated or unliquidated, determined or undetermined, including under any
swap, derivative, foreign exchange, hedge, deposit, treasury management or other
similar transaction or arrangement (specifically including, without limitation,
any Transactional Risk Exposure, as such term is defined in the Addendum to
Security Agreement attached hereto), and whether Debtor may be liable
individually or jointly with others, or whether recovery upon such Indebtedness
may be or hereafter becomes unenforceable.

        


        3.            
 TERMINATION.  This Agreement will terminate upon the performance
of all obligations of Debtor to Bank secured hereby, including without
limitation, the payment of all Indebtedness of Debtor to Bank secured hereby,
and the termination of all commitments of Bank to extend credit to Debtor,
existing at the time Bank receives written notice from Debtor of the termination
of this Agreement.

        


        4.             
OBLIGATIONS OF BANK.  Any money received by Bank in respect of the
Collateral may be deposited, at Bank's option, into the Securities Account or
into a deposit account which serves as collateral for the Indebtedness secured
hereby, and the same shall, for all purposes, be deemed Collateral
hereunder.  Bank shall have no duty to take any steps necessary to
preserve the rights of Debtor against prior parties, or to initiate any action
to protect against the possibility of a decline in the market value of the
Collateral or Proceeds.  Bank shall not be obligated to take any
action with respect to the Collateral or Proceeds requested by Debtor unless
such action is specifically required under this Section 4 and such request is
made in writing and Bank determines, in its sole discretion, that the requested
action would not unreasonably jeopardize the value of the Collateral and
Proceeds as security for the Indebtedness secured hereby.  Prior to
the occurrence of an Event of Default and on the condition that, after giving
effect to such payment, no Event of Default will occur (specifically including,
without limitation, a failure to comply with the Required Minimum Value covenant
set forth in the Addendum to Security Agreement attached hereto, as the same may
be modified or amended from to time), Bank shall, if instructed to do so in
writing by Debtor, apply funds in the Account to pay any Indebtedness secured
hereby.

        


        5.             
REPRESENTATIONS AND WARRANTIES.  Debtor represents and warrants to
Bank that:  (a) Debtor's legal name is exactly as set forth on the
first page of this Agreement, and all of Debtor's organizational documents or
agreements delivered to Bank are complete and accurate in every respect;
(b) Debtor is a corporation registered under the laws of the Commonwealth
of Virginia; (c) Debtor’s chief executive office is located at 3102 Shawnee
Drive, Winchester, Virginia 22601; (d) Debtor is the owner of the Collateral and
Proceeds; (e) Debtor has the exclusive right to grant a security interest
in the Collateral and Proceeds; (f) all Collateral and Proceeds are genuine,
free from liens, adverse claims, setoffs, default, prepayment, defenses and
conditions precedent of any kind or character, except the lien created hereby or
as otherwise agreed to by Bank, or heretofore disclosed by Debtor to Bank, in
writing; (g) all statements of Debtor contained herein are true and
complete in all material respects; (h) no financing statement or control
agreement covering any of the Collateral or Proceeds, and naming any secured
party other than Bank, exists or is on file in any public office or remains in
effect; and (i) no person or entity, other than Debtor, Bank and
Intermediary, has any interest in or control over the Collateral.

        


        6.            
 COVENANTS OF DEBTOR.

        


        (a)           Debtor
agrees in general:  (i) to pay Indebtedness secured hereby when due;
(ii) to permit Bank to exercise its powers hereunder; (iii) to execute and
deliver such documents as Bank reasonably deems necessary to create, perfect and
continue the security interests contemplated hereby; (iv) not to change its
name, its chief executive office or the jurisdiction in which it is organized
and/or registered without giving Bank prior written notice thereof; (v) to
cooperate with Bank in perfecting all security interests granted herein and in
obtaining such agreements from third parties as Bank deems necessary, proper or
convenient in connection with the preservation, perfection or enforcement of any
of its rights hereunder.

        


        (b)           Debtor
agrees with regard to the Collateral and Proceeds, unless Bank agrees otherwise
in writing:  (i) that Bank is authorized to file financing statements
in the name of Debtor to perfect Bank's security interest in the Collateral and
Proceeds; (ii) not to permit any security interest in or lien on the
Collateral or Proceeds, except in favor of Bank and except liens in favor of
Intermediary to the extent expressly permitted by Bank in writing; (iii) not to
hypothecate or permit the transfer by operation of law of any of the Collateral
or Proceeds or any interest therein; (iv) to keep, in accordance with generally
accepted accounting principles, complete and accurate records regarding all
Collateral and Proceeds, and to permit Bank to inspect the same and make copies
thereof at any reasonable time; (v) if requested by Bank following the
occurrence of an Event of Default or in order to comply with the Required
Minimum Value covenant set forth in the Addendum to Security Agreement attached
hereto, to receive and use reasonable diligence to collect Proceeds, in trust
and as the property of Bank, and to immediately endorse as appropriate and
deliver such Proceeds to Bank daily in the exact form in which they are received
together with a collection report in form satisfactory to Bank; (vi) to provide
any service and do any other acts which may be necessary to keep all Collateral
and Proceeds free and clear of all defenses, rights of offset and counterclaims;
and (vii) if the Collateral or Proceeds consists of securities and so long as no
Event of Default exists, to vote said securities and to give consents, waivers
and ratifications with respect thereto, provided that no vote shall be cast or
consent, waiver or ratification given or action taken which would impair Bank's
interests in the Collateral and Proceeds or be inconsistent with or violate any
provisions of this Agreement.  Debtor further agrees that any party
now or at any time hereafter authorized by Debtor to advise or otherwise act
with respect to the Securities Account shall be subject to all terms and
conditions contained herein and in any control, custodial or other similar
agreement at any time in effect among Bank, Debtor and Intermediary relating to
the Collateral.

        


        7.             
POWERS OF BANK.  Debtor appoints Bank its true attorney in fact to
perform any of the following powers, which are coupled with an interest, are
irrevocable until termination of this Agreement and may be exercised from time
to time by Bank's officers and employees, or any of them, if an Event of Default
has occurred and is continuing:  (a) to perform any obligation of
Debtor hereunder in Debtor's name or otherwise; (b) to notify any person
obligated on any security, instrument or other document subject to this
Agreement of Bank's rights hereunder; (c) to collect by legal proceedings or
otherwise all dividends, interest, principal or other sums now or hereafter
payable upon or on account of the Collateral or Proceeds; (d) to enter into any
extension, modification, reorganization, deposit, merger or consolidation
agreement, or any other agreement relating to or affecting the Collateral or
Proceeds, and in connection therewith to deposit or surrender control of the
Collateral and Proceeds, to accept other property in exchange for the Collateral
and Proceeds, and to do and perform such acts and things as Bank may deem
proper, with any money or property received in exchange for the Collateral or
Proceeds, at Bank's option, to be applied to the Indebtedness secured hereby or
held by Bank under this Agreement; (e) to make any compromise or settlement Bank
deems desirable or proper in respect of the Collateral and Proceeds; (f) to
insure, process and preserve the Collateral and Proceeds; (g) to exercise all
rights, powers and remedies which Debtor would have, but for this Agreement,
with respect to all Collateral and Proceeds; and (h) to do all acts and things
and execute all documents in the name of Debtor or otherwise, deemed by Bank as
necessary, proper and convenient in connection with the preservation, perfection
or enforcement of its rights hereunder.  To effect the purposes of
this Agreement or otherwise upon instructions of Debtor, or any of them, Bank
may cause any Collateral and/or Proceeds to be transferred to Bank's name or the
name of Bank's nominee.  If an Event of Default has occurred and is
continuing, any or all Collateral and/or Proceeds consisting of securities may
be registered, without notice, in the name of Bank or its nominee, and
thereafter Bank or its nominee may exercise, without notice, all voting and
corporate rights at any meeting of the shareholders of the issuer thereof, any
and all rights of conversion, exchange or subscription, or any other rights,
privileges or options pertaining to such Collateral and/or Proceeds, all as if
it were the absolute owner thereof.  The foregoing shall include,
without limitation, the right of Bank or its nominee to exchange, at its
discretion, any and all Collateral and/or Proceeds upon the merger,
consolidation, reorganization, recapitalization or other readjustment of the
issuer thereof, or upon the exercise by the issuer thereof or Bank of any right,
privilege or option pertaining to any shares of the Collateral and/or Proceeds,
and in connection therewith, the right to deposit and deliver any and all of the
Collateral and/or Proceeds with any committee, depository, transfer agent,
registrar or other designated agency upon such terms and conditions as Bank may
determine.  All of the foregoing rights, privileges or options may be
exercised without liability on the part of Bank or its nominee except to account
for property actually received by Bank.  Bank shall have no duty to
exercise any of the foregoing, or any other rights, privileges or options with
respect to the Collateral or Proceeds and shall not be responsible for any
failure to do so or delay in so doing.

        


        8.             
PAYMENT OF PREMIUMS, TAXES, CHARGES, LIENS AND ASSESSMENTS.  Debtor
agrees to pay, prior to delinquency, all insurance premiums, taxes, charges,
liens and assessments against the Collateral and Proceeds (except (a) such as
Debtor may in good faith contest or as to which a bona fide dispute may arise,
and (b) for which Debtor has made provision, in accordance with generally
accepted accounting principles, for eventual payment thereof in the event Debtor
is obligated to make such payment), and upon the failure of Debtor to do so,
Bank at its option may pay any of them and shall be the sole judge of the
legality or validity thereof and the amount necessary to discharge the
same.  Any such payments made by Bank shall be obligations of Debtor
to Bank, due and payable immediately upon demand, together with interest at a
rate determined in accordance with the provisions of this Agreement, and shall
be secured by the Collateral and Proceeds, subject to all terms and conditions
of this Agreement.

        


        9.            
 EVENTS OF DEFAULT.  Any defined event of default under the
Credit Agreement shall constitute an “Event of Default” under this
Agreement.

        


        10.           
REMEDIES.  Upon the occurrence of any Event of Default, Bank shall
have the right to declare immediately due and payable all or any Indebtedness
secured hereby and to terminate any commitments to make loans or otherwise
extend credit to Debtor.  Bank shall have all other rights, powers,
privileges and remedies granted to a secured party upon default under the
Virginia Uniform Commercial Code or otherwise provided by law, including without
limitation, the right (a) to contact all persons obligated to Debtor on any
Collateral or Proceeds and to instruct such persons to deliver all Collateral
and/or Proceeds directly to Bank, and (b) to sell, lease, license or otherwise
dispose of any or all Collateral.  All rights, powers, privileges and
remedies of Bank shall be cumulative.  No delay, failure or
discontinuance of Bank in exercising any right, power, privilege or remedy
hereunder shall affect or operate as a waiver of such right, power, privilege or
remedy; nor shall any single or partial exercise of any such right, power,
privilege or remedy preclude, waive or otherwise affect any other or further
exercise thereof or the exercise of any other right, power, privilege or
remedy.  Any waiver, permit, consent or approval of any kind by Bank
of any default hereunder, or any such waiver of any provisions or conditions
hereof, must be in writing and shall be effective only to the extent set forth
in writing.  It is agreed that public or private sales or other
dispositions, for cash or on credit, to a wholesaler or retailer or investor, or
user of property of the types subject to this Agreement, or public auctions, are
all commercially reasonable since differences in the prices generally realized
in the different kinds of dispositions are ordinarily offset by the differences
in the costs and credit risks of such dispositions.  While an Event of
Default exists:  (a) Debtor will not dispose of any Collateral or
Proceeds except on terms approved by Bank; (b) Bank may appropriate the
Collateral and apply all Proceeds toward repayment of the Indebtedness secured
hereby in such order of application as Bank may from time to time elect; (c)
Bank may take any action with respect to the Collateral contemplated by any
control, custodial or other similar agreement then in effect among Bank, Debtor
and Intermediary; and (d) at Bank's request, Debtor will assemble and deliver
all books and records pertaining to the Collateral or Proceeds to Bank at a
reasonably convenient place designated by Bank.  For any Collateral or
Proceeds consisting of securities, Bank shall have no obligation to delay a
disposition of any portion thereof for the period of time necessary to permit
the issuer thereof to register such securities for public sale under any
applicable state or Federal law, even if the issuer thereof would agree to do
so.  Debtor further agrees that Bank shall have no obligation to
process or prepare any Collateral for sale or other disposition.

        


        11.          
 DISPOSITION OF COLLATERAL AND PROCEEDS; TRANSFER OF
INDEBTEDNESS.  In disposing of Collateral hereunder, Bank may
transfer, convey or dispose of such Collateral “as is”, “where is”, “with all
faults” or with language of similar import.  Any proceeds of any
disposition of any Collateral or Proceeds, or any part thereof, may be applied
by Bank to the payment of expenses incurred by Bank in connection with the
foregoing, including reasonable attorneys' fees, and the balance of such
proceeds may be applied by Bank toward the payment of the Indebtedness secured
hereby in such order of application as Bank may from time to time
elect.  Upon the transfer of all or any part of the Indebtedness
secured hereby, Bank may transfer all or any part of the Collateral or Proceeds
and shall be fully discharged thereafter from all liability and responsibility
with respect to any of the foregoing so transferred, and the transferee shall be
vested with all rights and powers of Bank hereunder with respect to any of the
foregoing so transferred; but with respect to any Collateral or Proceeds not so
transferred, Bank shall retain all rights, powers, privileges and remedies
herein given.

        


        12.           
STATUTE OF LIMITATIONS.  Until all Indebtedness secured hereby shall
have been paid in full and all commitments by Bank to extend credit to Debtor
pursuant to the Credit Agreement have been terminated, the power of sale or
other disposition and all other rights, powers, privileges and remedies granted
to Bank hereunder shall continue to exist and may be exercised by Bank at any
time and from time to time irrespective of the fact that the Indebtedness
secured hereby or any part thereof may have become barred by any statute of
limitations, or that the personal liability of Debtor may have ceased, unless
such liability shall have ceased due to the payment in full of all Indebtedness
secured hereunder.

        


        13.          
 MISCELLANEOUS.  Debtor hereby waives any right to require Bank
to (i) proceed against Debtor or any other person, (ii) marshal assets or
proceed against or exhaust any security from Debtor or any other person, (iii)
perform any obligation of Debtor with respect to any Collateral or Proceeds, and
(iv) make any presentment or demand, or give any notice of nonpayment or
nonperformance, protest, notice of protest or notice of dishonor hereunder or in
connection with any Collateral or Proceeds.  Debtor further waives any
right to direct the application of payments or security for any Indebtedness
secured hereby.

        


        14.          
 NOTICES.  All notices, requests and demands required under this
Agreement must be in writing, addressed to Bank at the address specified in the
Credit Agreement and to Debtor at the address specified in the Credit Agreement,
and shall be deemed to have been given or made as follows: (a) if sent by hand
delivery, upon delivery; (b) if sent by mail, upon the earlier of the date of
receipt or three (3) days after deposit in the U.S. mail, first class and
postage prepaid; and (c) if sent by telecopy, upon receipt.

        


        15.          
 COSTS, EXPENSES AND ATTORNEYS' FEES.  Debtor shall pay to Bank
immediately upon demand the full amount of all payments, advances, charges,
costs and expenses, including reasonable attorneys' fees (to include outside
counsel fees but not allocated costs of Bank's in-house counsel), expended or
incurred by Bank in connection with (a) the perfection and preservation of the
Collateral or Bank's interest therein, and (b) the realization, enforcement and
exercise of any right, power, privilege or remedy conferred by this Agreement,
whether incurred at the trial or appellate level, in an arbitration proceeding
or otherwise, and including any of the foregoing incurred in connection with any
bankruptcy proceeding (including without limitation, any adversary proceeding,
contested matter or motion brought by Bank or any other person) relating to
Debtor or in any way affecting any of the Collateral or Bank's ability to
exercise any of its rights or remedies with respect thereto.

        


        16.            SUCCESSORS;
ASSIGNS; AMENDMENT.  This Agreement shall be binding upon and inure to
the benefit of the heirs, executors, administrators, legal representatives,
successors and assigns of the parties, and may be amended or modified only in
writing signed by Bank and Debtor.

        


        17.           INTENTIONALLY
DELETED.

        


        18.           
SEVERABILITY OF PROVISIONS.  If any provision of this Agreement shall
be held to 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 any remaining provisions
of this Agreement.

        


        19.         
  GOVERNING LAW.  This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of
Virginia.

        


        20.          
 ADDENDUM.  Additional terms and conditions relating to the
Securities Account are set forth in an Addendum attached hereto and incorporated
herein by this reference.

        


        


        


        


        [SIGNATURE
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        IN WITNESS WHEREOF, this Agreement has
been duly executed as of December 2, 2009.

        


        AMERICAN
WOODMARK CORPORATION,

        a
Virginia corporation

        


        


        By:         ________________________(SEAL)

        Jonathan H. Wolk,

        Vice President Finance and
CFO

        


        


        


        


        


        


        6963489_5.DOC


        
          
            
              
                	
                        COMMVA\SECA08A_VA.DOC
      (Rev. 03/08)

                      	
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