**Exhibit 4.1**

 

**MASTER SECURITY AGREEMENT**

 

**THISMASTER SECURITY AGREEMENT**, made as of December 29, 1999 (**“Agreement”**), by and between **GeneralElectric Capital Corporation, for itself and as agent for certain Participants**,a New York corporation with an address at **4 North Park Drive, Suite 500, Hunt Valley, Maryland21030, and its assigns** (together with its successors and assigns, ifany, **“SecuredParty”**), and **Atchison Casting Corporation**, a corporationorganized and existing under the laws of the State of Kansas with its chiefexecutive offices located at 400 S. Fourth Street, Atchison, Kansas 66002 (**“Debtor”**).

 

In consideration of the promises herein contained and of certain othergood and valuable consideration, the receipt and sufficiency of which arehereby acknowledged, Debtor and Secured Party hereby agree as follows:

 

**1.****                                     ****CREATION OF SECURITY INTEREST.**

 

Debtor hereby gives, grants and assigns to Secured Party, itssuccessors and assigns forever, a security interest in and against any and allproperty listed on any collateral schedule now or hereafter annexed hereto ormade a part hereof (**“Collateral Schedule”**), and in and againstany and all additions, attachments, accessories and accessions thereto, any andall substitutions, replacements or exchanges therefor, and any and allinsurance and/or other proceeds thereof (all of the foregoing being hereinafterindividually and collectively referred to as the **“Collateral”**).  The foregoing security interest is given tosecured the payment and performance of any and all debts, obligations andliabilities of any kind, nature or description whatsoever (whether primary,secondary, direct, contingent, sole, joint or several, or otherwise, andwhether due or to become due) of Debtor to Secured Party, now existing or hereafterarising, including but not limited to the payment and performance of certainPromissory Notes from time to time identified on any Collateral Schedule(collectively **“Notes”** and each a **“Note”**), and any renewals, extensions andmodifications of such debts, obligations and liabilities (all of the foregoingbeing hereinafter referred to as the **“Indebtedness”**).  Notwithstanding the foregoing, and notwithstanding anything tothe contrary contained elsewhere in this Agreement, to the extent that SecuredParty asserts a purchase money security interest in any items of Collateral (**“PMSICollateral”**):  (i) thePMSI Collateral shall secure only that portion of the Indebtedness which hasbeen advanced by Secured Party to enable Debtor to purchase, or acquire rightsin or the use of such PMSI Collateral (the **“PMSI Indebtedness”**), and (ii) noother Collateral shall secure the PMSI Indebtedness.

 

**2.****                                     ****REPRESENTATIONS, WARRANTIES AND COVENANTS OF DEBTOR.**

 

Debtor hereby represents, warrants and covenants as of the date hereofand as of the date of execution of each Collateral Schedule hereto that:

 

(a)                                  Debtor is, and will remain, dulyorganized, existing and in good standing under the laws of the State set forthin the first paragraph of this Agreement, has its chief executive offices atthe location set forth in such paragraph, and is, and will remain, dulyqualified and licensed in every jurisdiction wherever necessary to carry on itsbusiness and operations;

 

(b)                                 Debtor has adequate power and capacity toenter into, and to perform its obligations, under this Agreement, each Note andany other documents evidencing, or given in

 

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connection with, any of theIndebtedness (all of the foregoing being hereinafter referred to as the **“DebtDocuments”**);

 

(c)                                  This Agreement and the other DebtDocuments have been duly authorized, executed and delivered by Debtor andconstitute legal, valid and binding agreements enforceable under all applicablelaws in accordance with their terms, except to the extent that the enforcementof remedies may be limited under applicable bankruptcy and insolvency laws,similar laws affecting creditors generally and general principles of equity;

 

(d)                                 No approval, consent or withholding ofobjections is required from any governmental authority or instrumentality withrespect to the entry into, or performance by, Debtor of any of the DebtDocuments, except such as may have already been obtained;

 

(e)                                  The entry into, and performance by,Debtor of the Debt Documents will not (i) violate any of the organizationaldocuments of Debtor or any judgment, order, law or regulation applicable toDebtor, or (ii) result in any breach of, constitute a default under, orresult in the creation of any lien, claim or encumbrance on any of Debtor’sproperty (except for liens in favor of Secured Party) pursuant to any indenturemortgage, deed of trust, bank loan, credit agreement, or other agreement orinstrument to which Debtor is a party;

 

(f)                                    There are no suits or proceedings pendingor threatened in court of before any commission, board or other administrativeagency against Debtor which could, in the aggregate, have a material adverseeffect on Debtor, its business or operations, or its ability to perform itsobligations under the Debt Documents other than that described in Schedule 2(f)hereto;

 

(g)                                 All financial statements delivered toSecured Party in connection with the Indebtedness have been prepared inaccordance with generally accepted accounting principles, and since the date ofthe most recent financial statement, there has been no material adverse change;

 

(h)                                 The Collateral is not, and will not be,used by Debtor for personal, family or household purposes;

 

(i)                                     The Collateral is, and will remain, ingood condition and repair, ordinary wear and tear excepted, and Debtor will notbe negligent in the care and use thereof;

 

(j)                                     Debtor is, and will remain, the sole andlawful owner, and in possession of, the Collateral (except as expresslypermitted pursuant to Section 3(h) hereof), and has the sole right and lawfulauthority to grant the security interest described in this Agreement;

 

(k)                                  The Collateral is, and will remain, freeand clear of all liens, claims and encumbrances of every kind, nature anddescription, except for (i) liens in favor of Security Party,(ii) liens for taxes not yet due or for taxes being contested in goodfaith and which do not involve, in the reasonable judgment of Secured Party,any risk of the sale, forfeiture or loss of any of the Collateral having anaggregate value in excess of $250,000, and (iii) inchoate materialmen’s,mechanic’s, repairmen’s and similar liens arising by operation of law in thenormal course of business for amounts which are not delinquent (all of suchpermitted liens being hereinafter referred to as **“Permitted Liens”**);

 

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(l)                                     Debtor shall, at all times while anyIndebtedness is outstanding, remain the owner of the real property at which theCollateral is located and cause such real property (except as expresslypermitted pursuant to the Negative Pledge Agreements referred to in Section7(h) hereof) to remain free and clear of all liens, claims and encumbrances ofevery kind, nature and description, including without limitation, any lien orsecurity interest arising from a deed of trust, mortgage, assignment or lease,except for Permitted Liens; and

 

(m)                               At all times while any Indebtedness isoutstanding, Debtor hereby agrees that it shall comply with the followingcovenants:

 

1.                                       Minimum Tangible Net Worth. Debtor shall at all times maintain a minimum Tangible Net Worth(hereinafter defined) of not less than $90,000,000.

 

2.                                       Debt to Tangible Net Worth. Debtor will not permit the ratio of Debtor’s total current and long termdebt (as determined in accordance with generally accepted accounting principlesconsistently applied) to Debtor’s Tangible Net Worth to be greater than 2.00 to1.00, as measured quarterly.

 

3.                                       Debt Service Coverage Ratio. Debtor shall at all times maintain a ratio of Operating Cash Flow (ashereinafter defined) to Debt Service (as hereinafter defined) of not less than2.00 to 1.00, as measured quarterly on a rolling four-quarter basis.

 

As used herein:

 

(a)                                  the terms “Tangible Net Worth” means, asof any date, Debtor’s stockholder equity less Debtor’s intangible assets, asdetermined in accordance with generally accepted accounting principles,consistently applied;

 

(b)                                 the term “Operating Cash Flow” means, forany period, Debtor’s pre-tax net income, plus interest expense, plusdepreciation, amortization, and operating lease rentals, all determined inaccordance with generally accepted accounting principles, consistently applied;

 

(c)                                  the terms “Debt Service” means, for anyperiod, Debtor’s interest expense, plus operating lease rentals, determined inaccordance with generally accepted accounting principles, consistently applied.

 

Concurrently with the delivery of each financial statement pursuant toSection 5(b) hereof, Debtor shall deliver to Secured Party a compliancecertificate in form and substance satisfactory to Secured Party and signed byDebtor’s Chief Financial Officer or Treasurer that sets forth (x) thatDebtor is in compliance with the financial covenants provided in this Section5(b) and (y) the computations in reasonable detail demonstrating suchcompliance for the fiscal periods to which such financial statements relate.

 

**3.****                                     ****COLLATERAL.**

 

(a)                                  Until the declaration of any defaulthereunder, Debtor shall remain in possession of the Collateral except withrespect to Collateral sold pursuant to Section 3(h) hereof; provided, however,that Secured Party shall have the right to possess (i) any chattel paperor instrument that constitutes a part of the Collateral, and (ii) anyother Collateral which because of its nature may require that Secured Party’ssecurity interest therein be perfected by possession.  Secured

 

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Party, its successors andassigns, and their respective agents, shall have the right to examine andinspect any of the Collateral at any time during normal business hours.  Upon any request from Secured Party, Debtorshall provide Secured Party with notice of the then current location of theCollateral.

 

(b)                                 Debtor shall (i) use the Collateralonly in its trade or business, (ii) maintain all of the Collateral in goodcondition and working order, (iii) use and maintain the Collateral only incompliance with all applicable laws, and (iv) keep all of the Collateralfree and clear of all liens, claims and encumbrances (except for PermittedLiens).

 

(c)                                  Except as expressly permitted pursuant toSection 3(h) hereof, Debtor shall not, without the prior written consent ofSecured Party, (i) part with possession of any of the Collateral (exceptto Secured Party or for maintenance and repair), (ii) remove any of theCollateral from the continental United States, or (iii) sell, rent, lease,mortgage, grant a security interest in or otherwise transfer or encumber(except for Permitted Liens) any of the Collateral.

 

(d)                                 Debtor shall pay promptly when due alltaxes, license fees, assessments and public and private charges levied orassessed on any of the Collateral, on the use thereof, or on this Agreement orany of the other Debt Documents except for taxes, assessments and chargescontested in good faith and which do not involve in the reasonable judgement ofSecured Party, any risk of the sale, forfeiture or loss of any of theCollateral having an aggregate value in excess of $250,000.  At its option, Secured Party may dischargetaxes, liens, security interests or other encumbrances at any time levied orplaced on the Collateral and may pay for the maintenance, insurance andpreservation of the Collateral or to effect compliance with the terms of thisAgreement or any of the other Debt Documents. Debtor shall reimburse Secured Party, on demand, for any and allreasonable costs and expenses incurred by Secured Party in connection therewithand agrees that such reimbursement obligation shall be secured hereby.

 

(e)                                  Debtor shall, at all times, keep accurateand complete records of the Collateral, and Secured Party, its successors andassigns, and their respective agents, shall have the right to examine, inspect,and make extracts from all of Debtor’s books and records relating to theCollateral at any time during normal business hours.

 

(f)                                    If agreed by the parties, Secured Partymay, but shall in no event be obligated to, accept substitutions and exchangesof property for property, and additions to the property, constituting all orany part of the Collateral.  Suchsubstitutions, exchanges and additions shall be accomplished at any time andfrom time to time, by the substitution of a revised Collateral Schedule for theCollateral Schedule now or hereafter annexed. Any property which may be substituted, exchanged or added as aforesaidshall constitute a portion of the Collateral and shall be subject to thesecurity interest granted herein. Additions to, reductions or exchanges of, or substitutions for, theCollateral, payments on account of any obligation or liability secured hereby,increases in the obligations and liabilities secured hereby, or the creation ofadditional obligations and liabilities secured hereby, may from time to time bemade or occur without affecting the provisions of this Agreement or the provisionsof any obligation or liability which this Agreement secures.

 

(g)                                 Any third person at any time and fromtime to time holding all or any portion of the Collateral shall be deemed to,and shall, hold the Collateral as the agent of, and as pledge holder for,Secured Party.  At any time and fromtime to time, Secured Party may give notice to

 

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any third person holdingall or any portion of the Collateral that such third person is holding theCollateral as the agent of, and as pledge holder for, the Secured Party.

 

(h)                                 Notwithstanding anything herein to thecontrary, Debtor is permitted to sell, move, lease or otherwise dispose of anyCollateral provided that (i) the aggregate value of all Collateral sold,moved, leased or otherwise disposed of in any calendar year shall not exceed$500,000, (ii) Debtor shall replace the sold or disposed of Collateralwith property having an aggregate value equal to or greater than the value ofthe sold or disposed of Collateral and the replacement Collateral shall be freeand clear of all liens and encumbrances other than Permitted Liens and (iii)within thirty (30) days after the end of each calendar year Debtor delivers toSecured Party a written report describing in reasonable detail the item(s) ofCollateral having an original invoice cost of $100,000 or more that have beensold, moved, leased or disposed of and the Collateral that has replaced suchitem(s).

 

**4.****                                     ****INSURANCE.**

 

The Collateral shall at all times be held at Debtor’s risk, and Debtorshall keep it insured against loss or damage by fire and extended coverageperils, theft, burglary, and for any or all Collateral which are vehicles, forrisk of loss by collision, and where requested by Secured Party, against otherrisks as required thereby, for the full replacement value thereof, withcompanies, in amounts and under policies reasonably acceptable to SecuredParty.  Secured Party acknowledges thatthe policies of insurance currently in effect that have been delivered to itare acceptable.  Debtor shall, ifSecured Party so requires, deliver to Secured Party policies or certificates ofinsurance evidencing such coverage. Each policy shall name Secured Party as loss payee thereunder, shallprovide for coverage to Secured Party regardless of the breach by Debtor of anywarranty or representation made therein (if available), shall not be subject toco-insurance, and shall provide for thirty (30) days written notice to SecuredParty of the cancellation or material modification thereof.  Debtor hereby appoints Secured Party as itsattorney in face to make proof of loss, claim for insurance and adjustmentswith insurers, and to execute or endorse all documents, checks or drafts in connectionwith payments made as a result of any such insurance policies, provided thatSecured Party agrees that it shall not exercise such power unless an Event ofDefault has occurred and is continuing. Proceeds of insurance shall be applied, at the option of Secured Party,to repair or replace the Collateral or to reduce any of the Indebtednesssecured hereby, provided however, as long as no Event of Default has occurredand is continuing hereunder, the proceeds of insurance shall be distributed toDebtor if (a) the Collateral has been repaired or replaced in a timelyfashion with Collateral of equal or greater value, free and clear of all liensand encumbrances or (b) the proceeds of insurance are less than $2,000,000.00.

 

**5.****                                     ****REPORTS.**

 

(a)                                  Debtor shall promptly notify SecuredParty in the event of (i) any change in the name of Debtor, (ii) anyrelocation of its chief executive offices, (iii) any relocation of any ofthe Collateral but subject to Section 3(h) hereof, (iv) any of theCollateral having an aggregate value in excess of $250,000 being lost, stolen,missing, destroyed or materially damages, or (v) any lien, claim orencumbrance attaching or being made against any of the Collateral other thanPermitted Liens.

 

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(b)                                 Debtor will within ninety (90) days ofthe close of each fiscal year of Debtor, deliver to Secured Party, Debtor’scomplete financial statements, certified by a recognized firm of certifiedpublic accountants.  Debtor will, withinthirty (30) days after the date on which they are filed, deliver to SecuredParty all Forms 10-K and 10-Q filed with the Securities and ExchangeCommission.  Upon request Debtor willdeliver to Secured Party quarterly, within ninety (90) days of the close ofeach fiscal quarter of Debtor, in reasonable detail, copies of Debtor’squarterly financial report certified by the chief financial officer ofDebtor.  Upon request, Debtor willdeliver to Secured Party one copy of each financial statement, report, noticeor proxy statement sent by Debtor to shareholders generally and one copy ofeach regular or periodic report, registration statement or prospectus filed byDebtor with any securities exchange or the Securities and Exchange Commissionor any successor agency, such copies to be delivered to Secured Party withinthirty (30) days after they become available or are otherwise filed.  Any and all financial statements submittedand to be submitted to Secured Party have and will have been prepared on abasis of generally accepted accounting principles, and are and will be completeand correct and fairly present Debtor’s financial condition as at the datethereof.  Secured Party may at anyreasonable time examine the books and records of Debtor and make copiesthereof.

 

(c)                                  Within thirty (30) days after any requestby Secured Party, Debtor will furnish a certificate of an authorized officer ofDebtor stating that he has reviewed the activities of Debtor and that, to thebest of his knowledge, there exists no Event of Default (as described inSection 7) or event which with notice or lapse of time (or both) would becomean Event of Default.

 

**6.****                                     ****FURTHER ASSURANCES.**

 

(a)                                  Debtor shall, upon request of SecuredParty, furnish to Secured Party such further information, execute and deliverto Secured Party such documents and instruments (including, without limitation,Uniform Commercial Code financing statements) and do such other acts andthings, as Secured Party may at any time reasonably request relating to theperfection or protection of the security interest created by this Agreement orfor the purpose of carrying out the intent of this Agreement.  Without limiting the foregoing, Debtor shallcooperate and do all acts deemed necessary or advisable by Secured Party tocontinue in Secured Party a perfected first security interest in theCollateral, and shall obtain and furnish to Secured Party any subordinations,releases, landlord, lessor, or mortgagee waivers, and similar documents as maybe from to time to time reasonably requested by, and which are in form andsubstance reasonably satisfactory to, Secured Party.

 

(b)                                 Debtor hereby grants to Secured Party thepower to sign Debtor’s name and generally to act on behalf of Debtor to executeand file applications for title, transfers of title, financing statements,notices of lien and other documents pertaining to any or all of the Collateralbut Secured Party may not exercise such rights unless an Event of Default hasoccurred and is continuing.  Debtorshall, if any certificate of title be required or permitted by law for any ofthe Collateral, obtain such certificate showing the lien hereof with respect tothe Collateral and promptly deliver same to Secured Party.

 

(c)                                  Debtor shall indemnify and defend theSecured Party, its successors and assigns, and their respective directors,officers and employees, from and against any and all claims, actions and suits(including, without limitation, reasonable attorneys’ fees incurred inconnection

 

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therewith) of any kind,nature or description whatsoever arising, directly or indirectly, in connectionwith any of the Collateral.

 

**7.****                                     ****EVENTS OF DEFAULT.**

 

Debtor shall be in default under this Agreement and each of the otherDebt Documents upon the occurrence of any of the following “Event(s) ofDefault”:

 

(a)                                  Debtor fails to pay any installment orother amount due or coming due under any of the Debt Documents within ten (10)days after its due date;

 

(b)                                 Any attempt by Debtor, without the priorwritten consent of Secured Party, to sell, rent, lease, mortgage, grant asecurity interest in, or otherwise transfer or encumber (except for PermittedLiens) any of the Collateral or the real property at which the Collateral islocated, except as expressly permitted pursuant to Section 3(h) hereof;

 

(c)                                  Debtor fails to procure, or maintain ineffect at all times, any of the insurance on the Collateral in accordance withSection 4 of this Agreement;

 

(d)                                 Debtor breaches any of the financialcovenants set forth in Section 2(m);

 

(e)                                  Debtor breaches any of its otherobligations under any of the Debt Documents and fails to cure the same withinthirty (30) days after written notice thereof;

 

(f)                                    Any warranty, representation or statementmade by Debtor in any of the Debt Documents or otherwise in connection with anyof the Indebtedness shall be false or misleading in any material respect;

 

(g)                                 Any of the Collateral being subjected toattachment, execution, levy, seizure or confiscation in any legal proceeding;

 

(h)                                 Any default by Debtor under any otheragreement between Debtor and Secured Party, including but not limited to, thosecertain Negative Pledge Agreements dated the date hereof and recorded or to berecorded with the land records of Atchison County, Kansas and Buchanan County,Missouri;

 

(i)                                     Any insolvency or business failure ofDebtor;

 

(j)                                     The appointment of a receiver for all orany party of the property of Debtor, or any assignment for the benefit ofcreditors by Debtor;

 

(k)                                  The filing of a petition by Debtor underany bankruptcy, insolvency or similar law, or the filing of any such petitionagainst Debtor if the same is not dismissed within sixty (60) days of suchfiling;

 

(l)                                     Any default by Debtor under any paymentobligation for borrowed money, for the deferred purchase price of property orany lease that is uncured for thirty (30) days after the date such amount wasdue and payable and provided that such default allows for the acceleration ofsuch obligations or repossession of the collateral;

 

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(m)                               Any dissolution, termination ofexistence, merger or consolidation of Debtor (such action being referred to asan “Event”), unless not less than sixty (60) days prior to such Event:  (x) such person is organized andexisting under the laws of the United States or any state, and executes anddelivers to Secured Party an agreement containing an effective assumption bysuch person of the due and punctual performance of this Agreements; and (y)Secured Party is reasonably satisfied as to the credit worthiness of suchperson; or

 

(n)                                 As a result of or in connection with amaterial change in the ownership of Debtor’s capital stock, Debtor’sdebt-to-worth ratio equals or exceeds twice Debtor’s debt-to-worth ratio as ofthe date of this Agreement (unless Secured Party shall have given its priorwritten consent thereto).  As usedherein, **“debt-to-worthratio”** shall mean the ratio of (x) total liabilities which, inaccordance with generally accepted accounting principles (**“GAAP”**) would be included inthe liability side of a balance sheet, and (y) tangible net worth including thesum of the par or stated value of all outstanding capital stock, surplus andundivided profits, less any amounts attributable to goodwill, patents,copyrights, mailing lists, catalogs, trademarks, bond discount and underwritingexpenses, organization expense and other intangibles, all determined inaccordance with GAAP.

 

**8.****                                     ****REMEDIES ON DEFAULT.**

 

(a)                                  Upon the occurrence of an Event ofDefault under this Agreement, the Secured Party, at its option, may declare anyor all of the Indebtedness, including without limitation the Notes, to beimmediately due and payable, without demand or notice to Debtor.  The obligations and liabilities acceleratedthereby shall bear interest (both before and after any judgment) until paid infull at the lower of one percent (1%) per annum above the interest ratespecified in the applicable Note or the maximum rate not prohibited byapplicable law.

 

(b)                                 Upon such declaration of default, SecuredParty shall have all of the rights and remedies of a Secured Party under theUniform Commercial Code, and under any other applicable law.  Without limiting the foregoing, SecuredParty shall have the right to (i) notify any account debtor of Debtor orany obligor on any instrument which constitutes part of the Collateral to makepayment to the Secured Party, (ii) with or without legal process, enter anypremises where the Collateral may be and take possession and/or remove saidCollateral from said premises, (iii) sell the Collateral at public or privatesale, in whole or in part, and have the right to bid and purchase at said sale,and/or (iv) lease or otherwise dispose of all or part of the Collateral,applying proceeds therefrom to the obligations then in default.  If requested by Secured Party, Debtor shallpromptly assemble the Collateral and make it available to Secured Party at aplace to be designated by Secured Party which is reasonably convenient to bothparties.  Secured Party may also renderany or all of the Collateral unusable at the Debtor’s premises and may disposeof such Collateral on such premises without liability for rent or costs.  Any notice which Secured Party is requiredto give to Debtor under the Uniform Commercial Code of the time and place ofany public sale or the time after which any private sale or other intendeddisposition of the Collateral is to be made shall be deemed to constitutereasonable notice if such notice is given to the last known address of Debtorat least ten (10) days prior to such action.

 

(c)                                  Only upon the occurrence of an Event ofDefault under this Agreement, the Secured Party may record any or all mortgagesor deeds of trust executed by Debtor in favor of Secured Party in connectionwith the Notes and proceed to enforce all rights and remedies

 

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granted Secured Partyunder such documents.  All fees andcosts (including mortgage registration taxes) incurred in connection withrecording the mortgages and deeds of trust shall be paid by Debtor.

 

(d)                                 Proceeds from any sale or lease or otherdisposition shall be applied:  first, toall costs of repossession, storage, and disposition including withoutlimitation reasonable attorneys’, appraisers’, and auctioneers’ fees; second,to discharge the obligations then in default; third, to discharge any otherIndebtedness of Debtor to Secured Party, whether as obligor, endorser,guarantor, surety or indemnitor; fourth, to expenses incurred in paying orsettling liens and claims against the Collateral; and lastly, to Debtor, ifthere exists any surplus.  Debtor shallremain fully liable for any deficiency.

 

(e)                                  In the event this Agreement, any Note orany other Debt Documents are placed in the hands of an attorney for collectionof money due or to become due or to obtain performance of any provision hereof,Debtor agrees to pay all reasonable attorneys’ fees incurred by Secured Party,and further agrees that payment of such fees is secured hereunder.

 

(f)                                    Secured Party’s rights and remedieshereunder or otherwise arising are cumulative and may be exercised singularlyor concurrently.  Neither the failurenor any delay on the part of the Secured Party to exercise any right, power orprivilege hereunder shall operate as a waiver thereof, nor shall any single orpartial exercise of any right, power or privilege preclude any other or furtherexercise thereof or the exercise of any other right, power or privilege.  Secured Party shall not be deemed to havewaived any of its rights hereunder or under any other agreement, instrument orpaper signed by Debtor unless such waiver be in writing and signed by SecuredParty.  A waiver on any one occasionshall not be construed as a bar to or waiver of any right or remedy on anyfuture occasion.

 

(g)                                 DEBTOR HEREBY UNCONDITIONALLY WAIVES ITSRIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISINGOUT OF, DIRECTLY OR INDIRECTLY, THIS AGREEMENT, ANY OF THE OTHER DEBTDOCUMENTS, ANY OF THE INDEBTEDNESS SECURED HEREBY, ANY DEALINGS BETWEEN DEBTORAND SECURED PARTY RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION OR ANYRELATED TRANSACTIONS, AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED BETWEENDEBTOR AND SECURED PARTY.  THE SCOPE OFTHIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAYBE FILED IN ANY COURT (INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORTCLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORYCLAIMS).  THIS WAIVER IS IRREVOCABLE,MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVERSHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS ORMODIFICATIONS TO THIS AGREEMENT, ANY OTHER DEBT DOCUMENTS, OR TO ANY OTHERDOCUMENTS OR AGREEMENTS RELATING TO THIS TRANSACTION OR ANY RELATEDTRANSACTION.  IN THE EVENT OFLITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THECOURT.

 

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**9.****                                     ****MISCELLANEOUS.**

 

(a)                                  This Agreement, any Collateral Schedules,any Note and/or any of the other Debt Documents may be assigned, in whole or inpart, by Secured Party without notice to Debtor, and Debtor hereby waives anydefense, counterclaim or cross-complaint by Debtor against any assignee,agreeing that Secured Party shall be solely responsible therefor.  Debtor agrees that if Debtor receiveswritten notice of an assignment from Secured Party, Debtor shall pay allpayments and other amounts due under the assigned Note and Collateral Scheduleto such assignee or as instructed by Secured Party.  Debtor further agrees to confirm in writing receipt of the noticeof assignment as may be reasonably requested by Assignee.

 

(b)                                 All notices to be given in connectionwith this Agreement shall be in writing, shall be addressed to the parties attheir respective addresses set forth hereinabove (unless and until a differentaddress may be specified in a written notice to the other party), and shall bedeemed given (i) on the date of receipt if delivered in hand or by facsimiletransmission, (ii) on the next business day after being sent by express mail,and (iii) on the fourth business day after being sent by registered orcertified mail.  As used herein, theterm “business day” shall mean and include any day other than Saturdays, Sundays,or other days on which commercial banks in New York, New York are required orauthorized to be closed.

 

(c)                                  Time is of the essence hereof.  This Agreement shall be binding, jointly andseverally, upon all parties described as the “Debtor” and their respectiveheirs, executors, representatives, successors and assigns, and shall inure tothe benefit of Secured Party, its successors and assigns.

 

(d)                                 This Agreement and its CollateralSchedules constitute the entire agreement between the parties with respect tothe subject matter hereof and supersede all prior understandings (whetherwritten, verbal or implied) with respect thereto.  This Agreement and its Collateral Schedules shall not be changedor terminated orally or by course of conduct, but only by a writing signed byboth parties hereto.  Section headingscontained in this Agreement have been included for convenience only, and shallnot affect the construction or interpretation hereof.

 

(e)                                  This Agreement shall continue in fullforce and effect until all of the Indebtedness has been indefeasibly paid infull to Secured Party.  The surrender,upon payment or otherwise, of any Note or any of the other documents evidencingany of the Indebtedness shall not affect the right of Secured Party to retainthe Collateral for such other Indebtedness as may then exist or as it may bereasonably contemplated will exist in the future.  This Agreement shall automatically be reinstated in the eventthat Secured Party is ever required to return or restore the payment of all orany portion of the Indebtedness (all as though such payment had never beenmade).

 

(f)                                    Debtor acknowledges that is has beenadvised that General Electric Capital Corporation is acting hereunder foritself and as agent for certain third parties (each being herein referred to asa **“Participant”**and, collectively, as the **“Participants”**); that the interest of theSecured Party in this Agreement, the Notes, the Collateral Schedules, relatedinstruments and documents and/or the Collateral may be conveyed to, in whole orin part, and may be used as security for financing obtained from, one or morethird parties without the consent of Debtor (the **“Syndication”**).  Debtor agrees reasonably to cooperate withSecured Party in connection with the Syndication, including the execution anddelivery of such other documents, instruments,

 

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notices, opinions,certificates and acknowledgements as reasonably may be required by SecuredParty.

 

**INWITNESS WHEREOF,**Debtor and Secured Party, intending to be legally bound hereby, have dulyexecuted this Agreement in one or more counterparts, each of which shall bedeemed to be an original, as of the day and year first aforesaid.

 

 
| SECURED  PARTY:                                                                               |                    | DEBTOR:                          |
|-----------------------------------------------------------------------------------------------|-------------------------|----------------------------------|
|                                                                                          |                    |                             |
| **General Electric Capital Corporation,  for itself, and as agent for certain  Participants** |                    | **Atchison Casting Corporation** |
|                                                                                          |                    |                             |
|                                                                                          |                    |                             |
| By:                                                                                           | /s/ Louis J.  Vigliotti |                             |   | By: | /s/ Kevin T.  McDermed |   |
|                                                                                          |                    |                             |
| Title:  Transaction & Syndication Senior Manager                                          |                    | Title: V.P.  & Treasurer     |
|                                                                                               |                         |                                  |  |  |  |  |

 

11

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