PROMISSORY NOTE
CBorrower: Engineered Wire Products, Inc. Lender: Bank One, N A with its main office at Columbus, Ohio
1200 N. Warpole Street Lima Business Banking LPO
Upper Sandusky, OH 43351 121 W High Street. 2nd Floor
Lima, OH 45801
THIS COMMERCIAL SECURITY AGREEMENT dated January 5. 2004, is made and executed
between Engineered Wire Products, Inc. ("Grantor') and Bank One, N.A. with Its
main office at Columbus, Ohio ("Lender*)
GRANT OF SECURITY INTEREST. For valuable consideration, Grantor grants to Lender
a security Interest in the Collateral to secure the Indebtedness and agrees that
Lander shall have the rights stated in this Agreement with respect to the
Collateral, In addition to all other rights which Lender may have by law.
COLLATERAL DESCRIPTION. The word "Collateral" as used in this Agreement means
the following described property, whether now owned or hereafter acquired,
whether now existing or hereafter arising, and wherever located, in which
Grantor is giving to Lender a security interest for the payment of the
Indebtedness and performance of all other obligations under the Note and this
Agreement
All Inventory, Chattel Paper, Accounts, Equipment and General Intangibles
All of which "Collateral" shall have the meaning attributed to such word in the
Uniform Commercial Code referenced in the section of this Agreement captioned
"Definitions" (whenever such word appears in this Agreement, and whether the
first letter of such word is upper case or lower case) In addition, the word
"Collateral" also includes all the following, whether now owned or hereafter
acquired, whether now existing or hereafter arising, and wherever located
(A) All accessions, attachments, accessories, tools, parts, supplies,
replacements and additions to any of the collateral described herein, whether
added now or later
(B) All products and produce of any of the property described in this Collateral
section
ICI All accounts, general intangibles, instruments, rents, monies, payments, and
all other rights, arising out of a sale, lease, or other disposition of any of
the property described in this Collateral section
(D) All proceeds (including insurance proceeds) from the sale, destruction,
loss, or other disposition of any of the property described in this Collateral
section, and suns due from a third party who has damaged or destroyed the
Collateral or from that party's insurer, whether due to judgment, settlement or
other process.
(E) All records and date relating to any of the property described in this
Collateral section, whether in the form of a writing, photograph, microfilm,
microfiche, or electronic media, together with all of Grantor's right, title,
and interest in and to all computer software required to utilize, create,
maintain, and process any such records or date on electronic media
Despite any other provision of this Agreement, Lender is not granted, and will
not have, a nonpurchase money security interest in household goods, to the
extent such a security interest would be prohibited by applicable low In
addition, if because of the type of any Property, Lender is required to give a
notice of the right to cancel under Truth in Lending for the Indebtedness, then
Lender will not have a security interest in such Property unless and until such
a notice is given
CROSS-COLLATERALIZATION In addition to the Note, this Agreement secures all
obligations, debts and liabilities, plus interest thereon, of Grantor to Lender,
or any one or more of them, as well as all claims by Lender against Grantor or
any one or more of them, whether now existing or hereafter arising, whether
related or unrelated to the purpose of the Note, whether voluntary or otherwise,
whether due or not due, direct or indirect, absolute or contingent, liquidated
or unliquidated and whether Grantor may be liable individually or jointly with
others, whether obligated as guarantor, surety, accomodation party or otherwise
RIGHT OF SETOFF Grantor grants to Lender a security interest in, as well as a
right of setoff against, and hereby assigns, convoys, delivers, pledges and
transfers to Lender, as security for repayment of the Indebtedness, all
Grantor's right, title and interest in and to all Grantor's accounts (whether
checking, savings, or some other account) with Lender or any subsidiary or
affiliate of BANK ONE CORPORATION leach hereinafter referred to as a "Lender
Affiliate") and all other obligations at any time owing by Lender or any Lender
Affiliate to Grantor This includes all accounts Grantor holds jointly with
someone else and all accounts Grantor may open in the future However, this does
not include any IRA or Keogh accounts, or any trust accounts for which the grant
of a security interest would be prohibited by law Grantor authorizes Lender,
without prior notice to Grantor and irrespective of (i1 whether or not Lender
has made any demand under this Agreement or the Related Documents or (n) whether
such Indebtedness is contingent, matured or unmetured, to the extent permitted
by law, to collect, charge and/or setoff all sums owing on the Indebtedness
against any and all such accounts and other obligations, and, at Lender's
option, to administratively freeze or direct a Lender Affiliate to
administratively freeze all such accounts and other obligations to allow Lender
to protect Lender's security interest, collection, charge and setoff rights
provided in this paragraph.
GRANTOR'S REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COLLATERAL. With
respect to the Collateral, Grantor covenants, agrees, represents and warrants to
Lender that
Perfection of Security Interest. Grantor agrees to execute financing statements
and to take whatever other actions are requested by Lender to perfect and
continue Lender's security interest in the Collateral Upon request of Lender,
Grantor will deliver to Lender any and all of the documents evidencing or
constituting the Collateral, and Grantor will note Lender's interest upon any
and all chattel paper if not delivered to Lender for possession by Lender This
Is a continuing Security Agreement and will continue in effect even though all
or any part of the Indebtedness Is paid in full and even though for a period of
time Grantor may not be indebted to Lender.
Notices to Lender, Grantor will promptly notify Lender in writing at Lender's
address shown above (or such other addresses as Lender may designate from time
to time) prior to any (1) change in Grantor's name, 121 change in Grantor's
assumed business name(s), (3) change in the management of the Corporation
Grantor, (4) change in the authorized signer(s); (5) change in Grantor's
principal office address, 16) change in Grantor's stale of organization, (7)
conversion of Grantor to a new or different type of business entity, or (8)
change in any other aspect of Grantor that directly or indirectly relates to any
agreements between Grantor and Lender No change in Grantor's name or state of
organization will take effect until after Lender has received notice
No Violation, The execution and delivery of this Agreement will not violate any
low or agreement governing Grantor or to which Grantor is a party, and its
certificate or articles of incorporation and bylaws or code of regulations do
not prohibit any term or condition of this Agreement,
Enforceability of Collateral. To the extent the Collateral consists of accounts,
chattel paper, or general intangibles, the Collateral is enforceable in
accordance with its terms, is genuine, and fully complies with all applicable
laws and regulations concerning form, content and manner of preparation and
execution, and all persons appearing to be obligated on the Collateral have
authority and capacity to contract and are in fact obligated as they appear to
be on the Collateral At the time any account becomes subject to a security
interest in favor of Lander, the account shall be a good and valid account
representing an undisputed, bona fide indebtedness incurred by the account
debtor, for merchandise held subject to delivery instructions or previously
shipped or delivered pursuant to a contract of sale, or for services previously
performed by Grantor with or for the account debtor. So long as this Agreement
remains in effect, Grantor shall not, without Lender's prior written consent,
compromise, settle, adjust. or extend payment under or with regard to any such
account There shall be no setoffs or counterclaims against any of the
Collateral, and no agreement shall have been made under which any deductions or
discounts may be claimed concerning the Collateral except those disclosed to
Lender in writing
Location of the Collateral. Except in the ordinary course of Grantor's business,
Grantor agrees to keep the Collateral (or to the extent the Collateral consists
of intangible property such as accounts or general intangibles, the records
concerning the Collateral) at Grantor's address shown above or at such other
locations as are acceptable to Lender, Upon Lender's request, Grantor will
deliver to Lender in form satisfactory to Lender a schedule of real properties
and Collateral locations relating to Grantor's operations, including without
limitation the following. (1) all real property Grantor owns or is purchasing,
(21 all real property Grantor is renting or leasing, 131 all storage facilities
Grantor owns, rents, leases, or uses, and (41 all other properties where
Collateral is or may be located. If the Collateral is equipment, such equipment
shall be located at the addresses shown and shall not be attached to or
incorporated into any real property in such a manner that it becomes a fixture
thereon.
Removal of the Collateral. Except in the ordinary course of Grantor's business,
including the sales of inventory, Grantor shall not remove the Collateral from
its existing location without Lender's prior written consent To the extent the
Collateral consists of accounts or general intangibles, the Grantor shall not
relocate the records concerning such Collateral from Grantor's address shown
above without written notification to and approval of the Lender To the extent
that the Collateral consists of vehicles, or other titled property, Grantor
shall not take or permit any action which would require application for
certificates of title for the vehicles outside the State of Ohio, without
Lender's prior written consent. Grantor shall, whenever requested, advise Lender
of the exact location of the Collateral
Transactions Involving Collateral, Except for inventory sold or accounts
collected in the ordinary course of Grantor's business, or as otherwise provided
for in this Agreement, Grantor shall not sell, offer to sell, or otherwise
transfer or dispose of the Collateral. While Grantor is not in default under
this Agreement, Grantor may sell inventory, but only in the ordinary course of
its business and only to buyers who qualify as a buyer in the ordinary course of
business A sale in the ordinary course of Grantor's business does not include a
transfer in partial or total satisfaction of a debt or any bulk sale Grantor
shall not pledge, mortgage, encumber or otherwise permit the Collateral to be
subject to any lien, security interest, encumbrance, or charge, other than the
security interest provided for in this Agreement, without the prior written
consent of Lender This includes security interests even if junior in right to
the security interests granted under this Agreement Unless waived by Lender, all
proceeds from any disposition of the Collateral (for whatever reason) shall be
hold in trust for Lender and shall not be commingled with any other funds,
provided however, this requirement shall not constitute consent by Lender to any
sale or other disposition. Upon receipt, Grantor shall immediately deliver any
such proceeds to Lender.
Title. Grantor represents and warrants to Lender that Grantor holds good and
marketable title to the Collateral, free and clear of all lions and encumbrances
except for the lien of this Agreement. No financing statement covering any of
the Collateral is on file in any public office other than those which reflect
the security interest created by this Agreement or to which Lender has
specifically consented Grantor shall defend Lender's rights in the Collateral
against the claims and demands of all other persons.
Repairs and Maintenance. Grantor agrees to keep and maintain, and to cause
others to keep and maintain, the Collateral in good order, repair and condition
at all times while this Agreement remains in effect Grantor further agrees to
pay when due all claims for work done on, or services rendered or materiel
furnished in connection with the Collateral so that no lien or encumbrance may
ever attach to or be filed against the Collateral
Inspection of Collateral- Lender and Lender's designated representatives and
agents shell have the right at all reasonable times to examine, audit and
inspect the Collateral wherever located. To the extent any of the following
types of property are Included in the Collateral, then as often as Lender shall
require, in detail satisfactory to Lender. Grantor shall deliver to Lender
schedules of accounts and general intangibles, Including, without limitation,
names and addresses of account debtors and aging reports, and lists and
descriptions of the nature and location of inventory and equipment
Taxes, Assessments and Liens. Grantor will pay when due all taxes, assessments
and liens upon the Collateral, its use or operation, upon this Agreement, upon
any promissory note or notes evidencing the Indebtedness, or upon any of the
other Related Documents Grantor may withhold any such payment or may elect to
contest any lien if Grantor is in good faith conducting an appropriate
proceeding to contest the obligation to pay and so long as Lender's Interest in
the Collateral is not jeopardized in Lender's sole opinion. It the Collateral is
subjected to a lien which is not discharged within fifteen 1151 days, Grantor
shall deposit with Lender cash, a sufficient corporate surety bond or other
security satisfactory to Lender in an amount adequate to provide for the
discharge of the lien plus any interest, costs attorneys' fees or other charges
that could accrue as a result of foreclosure or sale of the Collateral In any
contest Grantor shall defend itself and Lender and shall satisfy any final
adverse judgment before enforcement against the Collateral. Grantor shall name
Lender as an additional obligee under any surety bond furnished in the contest
proceedings Grantor further agrees to furnish Lender with evidence that such
taxes, assessments, end governmental and other charges have been paid in full
and in a timely manner Grantor may withhold any such payment or may elect to
contest any lien if Grantor is in good faith conducting an appropriate
proceeding to contest the obligation to pay and so long as Lender's interest in
the Collateral is not jeopardized
Compliance with Governmental Requirements. Grantor shall comply promptly with
all laws, ordinances, rules and regulations of all governmental authorities, now
or hereafter in effect, applicable to the ownership, production, disposition, or
use of the Collateral, including all laws or regulations relating to the undue
erosion of highly-erodible land or relating to the conversion of wetlands for
the production of en agricultural product or commodity Grantor may contest in
good faith any such law, ordinance or regulation and withhold compliance during
any proceeding, including appropriate appeals, so long as Lender's interest in
the Collateral, in Lender's opinion, is not jeopardized.
Hazardous Substances. Grantor represents and warrants that the Collateral never
has been, and never will be so long as this Agreement remains a lien on the
Collateral, used in violation of any Environmental Laws, that the business
operations of Grantor are not now, and have never been, the subject of any
governmental authority's investigation regarding non-compliance with
Environmental Laws, that Grantor is not aware of any material contingent
liability related to the violation of any Environmental Law, end that the
Collateral shall not be used for the improper or unlawful manufacture, storage,
transportation, treatment, disposal, release or threatened release of any
Hazardous Substance. The representations and warranties contained herein are
based on Grantor's due diligence in investigating the Collateral for Hazardous
Substances Grantor hereby (1) releases and waives any future claims against
Lender for indemnity or contribution in the event Grantor becomes liable for
cleanup or other costs under any Environmental Laws, and t2) agrees to indemnity
and hold harmless Lender against any and all claims and losses resulting from a
breach of this provision of this Agreement This obligation to indemnify shall
survive the payment of the Indebtedness and the satisfaction of this Agreement.
Maintenance of Casualty Insurance. Grantor shall procure and maintain all risks
insurance, including without limitation fire, theft and liability coverage
together with such other insurance as Lender may require with respect to the
Collateral, in form, amounts, coverages and basis reasonably acceptable to
Lender and issued by a company or companies reasonably acceptable to Lender
Grantor, upon request of Lender, will deliver to Lender from time to time the
policies or certificates of insurance in form satisfactory to Lender, including
stipulations that coverages will not be cancelled or diminished without at least
thirty 130) days' prior written notice to Lender and not including any
disclaimer of the insurer's liability for failure to give such a notice Each
insurance policy also shall include an endorsement providing that coverage in
favor of Lender will not be impaired in any way by any act, omission or default
of Grantor or any other person In connection with all policies covering assets
in which Lender holds or is offered a security interest, Grantor will provide
Lender with such loss payable or other endorsements as Lender may require. If
Grantor at any time fails to obtain or maintain any insurance as required under
this Agreement, Lender may (but shall not be obligated to) obtain such insurance
as Lender deems appropriate, including if Lender so chooses "single interest
insurance," which will cover only Lender's interest in the Collateral
Application of Insurance Proceeds. Grantor shell promptly notify Lender of any
loss or damage to the Collateral Lender may make proof of loss if Grantor fails
to do so within fifteen (15) days of the casualty All proceeds of any insurance
on the Collateral, including accrued proceeds thereon, shall be held by Lender
as part of the Collateral If Lender consents to repair or replacement of the
damaged or destroyed Collateral, Lender shall, upon satisfactory proof of
expenditure, pay or reimburse Grantor from the proceeds for the reasonable cost
of repair or restoration If Lender does not consent to repair or replacement of
the Collateral, Lender shall retain a sufficient amount of the proceeds to pay
all of the Indebtedness, and shell pay the balance to Grantor Any proceeds which
have not been disbursed within six (6) months after their receipt and which
Grantor has not committed to the repair or restoration of the Collateral shall
be used to prepay the Indebtedness
Insurance Reserves. Lender may require Grantor to maintain with Lender reserves
for payment of insurance premiums, which reserves shall be created by monthly
payments from Grantor of a sum estimated by Lender to be sufficient to produce,
at least fifteen (15) days before the premium due date, amounts at least equal
to the insurance premiums to be paid. If fifteen (15) days before payment is
due, the reserve funds are insufficient, Grantor shall upon demand pay any
deficiency to Lender The reserve funds shall be held by Lender as a general
deposit and shall constitute a non-interest-bearing account which Lender may
satisfy by payment of the insurance premiums required to be paid by Grantor as
they become due Lender does not hold the reserve funds in trust for Grantor, and
Lender is not the agent of Grantor for payment of the insurance premiums
required to be paid by Grantor The responsibility for the payment of premiums
shall remain Grantor's sole responsibility,
Insurance Reports. Grantor, upon request of Lender, shall furnish to Lender
reports on each existing policy of insurance showing such information as Lender
may reasonably request including the following' (1) the name of the insurer, (2)
the risks insured; (3) the amount of the policy. (4) the property insured, (5)
the then current value on the basis of which insurance has been obtained and the
manner of determining that value; and (6) the expiration date of the policy. In
addition, Grantor shall upon request by Lender (however not more often than
annually) have an independent appraiser satisfactory to Lender determine, as
applicable, the cash value or replacement cost of the Collateral
GRANTOR'S RIGHT TO POSSESSION AND TO COLLECT ACCOUNTS Until the occurrence of
any Event of Default and except as otherwise provided below with respect to
accounts, Grantor may have possession of the tangible personal property and
beneficial use of all the Collateral and may use it in any lawful manner not
inconsistent with this Agreement or the Related Documents, provided that
Grantor's right to possession and beneficial use shall not apply to any
Collateral where possession of the Collateral by Lender is required by law to
perfect Lender's security interest in such Collateral Until otherwise notified
by Lender, Grantor may collect any of the Collateral consisting of accounts At
any time and even though no Event of Default exists, Lender may exercise its
rights to collect the accounts and to notify account debtors to make payments
directly to Lender for application to the Indebtedness If Lender at any time has
possession of any Collateral, whether before or after an Event of Default,
Lender shall be deemed to have exercised reasonable care in the custody and
preservation of the Collateral if Lender takes such action for that purpose as
Grantor shall request or as Lender, in Lender's sole discretion, shall deem
appropriate under the circumstances, but failure to honor any request by Grantor
shall not of itself be deemed to be a failure to exercise reasonable care Lender
shall not be required to take any steps necessary to preserve any rights in the
Collateral against prior parties, nor to protect, preserve or maintain any
security interest given to secure the Indebtedness.
LENDER'S EXPENDITURES. If any action or proceeding is commenced that would
materially affect Lender's interest In the Collateral or if Grantor fads to
comply with any provision of this Agreement or any Related Documents, including
but not limited to Grantor's failure to discharge or pay when due any amounts
Grantor is required to discharge or pay under this Agreement or any Related
Documents, Lender on Grantor's behalf may (but shall not be obligated to) take
any action that Lender deems appropriate, including but not limited to
discharging or paying all taxes, lions, security Interests, encumbrances and
other claims, at any time levied or placed on the Collateral and paying all
costs for insuring, maintaining and preserving the Collateral All such
expenditures incurred or paid by Lender for such purposes will then bear
Interest at the rate charged under the Note from the date incurred or paid by
Lender to the date of repayment by Grantor. All such expenses will become e part
of the Indebtedness and, at Lender's option, will (A) be payable on demand, (B)
be added to the balance of the Note and be apportioned among and be payable with
any installment payments to become due during either (1) the term of any
applicable insurance policy, 12) the remaining term of the Note, or 13) be
treated as a balloon payment which will be due and payable at the Note's
maturity. The Collateral also will secure payment of these amounts Such right
shall be in addition to all other rights and remedies to which Lender may be
entitled upon Default
DEFAULT Each of the following shall constitute en Event of Default under this
Agreement: Payment Default. Grantor fails to make any payment when due under the
Indebtedness
Other Defaults. Grantor fails to comply with or to pay or perform any other
term, obligation, covenant or condition contained in this Agreement or in any of
the Related Documents or to comply with or to pay or perform any term,
obligation, covenant or condition contained in any other agreement between
Lender and Grantor or between Grantor and any affiliate of BANK ONE CORPORATION
False Statements. Any warranty, representation or statement made or furnished to
Lender by Grantor or on Grantor's behalf under this Agreement, the Note, or the
Related Documents Is false or misleading in any material respect, either now or
at the time made or furnished or becomes false or misleading at any time
thereafter
Detective Collateralization. This Agreement or any of the Related Documents
ceases to be in full force and effect (Including failure of any collateral
document to create a valid and perfected security interest or lien) at any time
and for any reason
Insolvency. The dissolution or termination of Grantor's existence as a going
business, the insolvency of Grantor, the appointment of a receiver for any part
of Grantor's property, any assignment for the benefit of creditors, any type of
creditor workout, or the commencement of any proceeding under any bankruptcy or
insolvency laws by or against Grantor.
Creditor or Forfeiture Proceedings. Commencement of foreclosure, replevin.
repossession, attachment, levy, execution, or forfeiture proceedings, whether by
judicial proceeding, self-help, or any other method, by any creditor of Grantor,
or by any governmental agency against the Collateral or any other assets of
Grantor. This includes a garnishment of any of Grantor's accounts, including
deposit accounts, with Lender, However, this Event of Default shall not apply if
there is a good faith dispute by Grantor as to the validity or reasonableness of
the claim which is the basis of the creditor or forfeiture proceeding and it
Grantor gives Lender written notice of the creditor or forfeiture proceeding and
deposits with Lender monies or a surety bond for the creditor or forfeiture
proceeding, in an amount determined by Lender, in its sole discretion, as being
an adequate reserve or bond for the dispute
Adverse Change. A material adverse change occurs in Grantor's financial
condition, or Lender believes the prospect of payment or performance of the
Indebtedness is impaired
Events Affecting Guarantor Any of the preceding Events of Default occurs with
respect to any guarantor of the Indebtedness as If the word "guarantor" were
substituted for the word 'Grantor" in such Event of Default, or any guarantor
dies or becomes incompetent, or revokes or disputes the validity of, or
liability under, any guaranty of the Indebtedness
Insecurity. Lender in good faith believes itself insecure
RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this
Agreement, at any time thereafter. Lender shall have all the rights of a secured
party under the Ohio Uniform Commercial Code. In addition and without
limitation, Lender may exercise any one or more of the following rights and
remedies
Accelerate Indebtedness. Lender may declare the entire Indebtedness, including
any prepayment penalty which Grantor would be required to pay, immediately due
and payable, without notice of any kind to Grantor (except that In the case of
any Event of Default of the type described in the DEFAULT - Insolvency section
herein, such acceleration shall be automatic and not at Lender's option)
Assemble Collateral. Lender may require Grantor to deliver to Lender all or any
portion of the Collateral and any and all certificates of title and other
documents relating to the Collateral Lender may require Grantor to assemble the
Collateral and make it available to Lender at a place to be designated by
Lender. Lender also shall have full power to enter upon the property of Grantor
to take possession of and remove the Collateral, and prior to completion of the
removal, disable or otherwise secure the Collateral to prevent its use by
Grantor or any third parties, with or without process of law, and with or
without notice or demand If the Collateral contains other goods not covered by
this Agreement at the time of repossession. Grantor agrees Lender may take such
other goods, provided that Lender makes reasonable efforts to return them to
Grantor after repossession
Sell the Collateral. Lender shall have full power to sell, lease, transfer, or
otherwise deal with the Collateral or proceeds thereof in Lender's own name or
that of Grantor. Lender may sell the Collateral at public auction or private
sale Unless the Collateral threatens to decline speedily in value or is of a
type customarily sold on a recognized market, Lender will give Grantor
reasonable notice of the time after which any private sale or any other intended
disposition of the Collateral is to be made Lender may buy the Collateral, or
any portion thereof, at public sale or, if the Collateral is of the type which
is sold in a recognized market or subject to widely distributed price
quotations, at private sale Lender shall not be obligated to make any sale of
the Collateral regardless of notice of sale having been given Lender may adjourn
any public or private sale by announcement at the time and place fixed therefor,
and such sale may be made, without further notice, at such time and place
announced at such adjournment The requirements of reasonable notice shall be met
if such notice is given at least ten 110) days before the time of the sale or
disposition All expenses relating to the disposition of the Collateral,
including without limitation the expenses of retaking, holding, insuring,
preparing for sale and selling the Collateral, shall become a part of the
Indebtedness secured by this Agreement and shall be payable on demand, with
interest at the Note rate from date of expenditure until repaid.
Appoint Receiver To the extent permitted by applicable law Lender shall have the
right to have a receiver appointed to take possession of all or any part of the
Collateral, with the power to protect and preserve the Collateral, to operate
the Collateral preceding foreclosure or sale, and to collect the Rents from the
Collateral and apply the proceeds, over and above the cost of the receivership,
against the Indebtedness. The receiver may serve without bond if permitted by
law. Lender's right to the appointment of a receiver shall exist whether or not
the apparent value of the Collateral exceeds the Indebtedness by a substantial
amount Employment by Lender shall not disqualify a person from serving as a
receiver.
Collect Revenues, Apply Accounts. Lender, either itself or through a receiver,
may collect the payments, rents, income, and revenues from the Collateral Lender
may at any time in Lender's discretion transfer any Collateral Into Lender's own
name or that of Lender's nominee and receive the payments, rents, Income, and
revenues therefrom and hold the same as security for the Indebtedness or apply h
to payment of the Indebtedness in such order of preference as Lender may
determine Upon notice from the Lender or upon any Event of Default, the Grantor
agrees that all sums of money it receives on payment, settlement or otherwise
related to any Collateral, including, without limitation, on any accounts, shall
be held by Grantor as trustee for Lender without commingling with any of
Grantor's funds and shall be immediately delivered to the Bank. Insofar as the
Collateral consists of accounts, general intangibles, insurance policies,
instruments, chattel paper, chores in action, or similar property, Lender may
demand. collect, receipt for, settle, compromise, adjust, sue for, foreclose, or
realize on the Collateral as Lender may determine, whether or not Indebtedness
or Collateral is then due. For these purposes, Lender may, on behalf of and in
the name of Grantor, receive, open and dispose of mail addressed to Grantor;
change any address to which mail and payments are to be sent; and endorse notes,
checks, drafts, money orders, documents of title, instruments and items
pertaining to payment, shipment, or storage of any Collateral To facilitate
collection, Lender may notify account debtors and obligors on any Collateral to
make payments directly to Lender Grantor acknowledges that the Lender shall not
be obligated in any manner to make any demand, make any inquiry as to the nature
and sufficiency of any payment received by Lender, present or file any claim, or
take any other action to collect or enforce the payment of any amounts which may
have been due relate to the Collateral, including without limitation, any
amounts due on accounts.
Obtain Deficiency. If Lender chooses to sell any or all of the Collateral,
Lender may obtain a judgment against Grantor for any deficiency remaining on the
Indebtedness due to Lender after application of all amounts received from the
exercise of the rights provided in this Agreement. Grantor shall be liable for a
deficiency even if the transaction described in this subsection is a sale of
accounts or chattel paper
Other Rights and Remedies. Lender shall have all the rights and remedies of a
secured creditor under the provisions of the Ohio Uniform Commercial Code, as
may be amended from time to time. In addition, Lender shall have and may
exercise any or all other rights and remedies it may have available at law, in
equity, or otherwise
Election of Remedies. Except as may be prohibited by applicable law, all of
Lender's rights and remedies, whether evidenced by this Agreement, the Related
Documents, or by any other writing, shall be cumulative and may be exercised
singularly or concurrently Election by Lender to pursue any remedy will not bar
any other remedy, and an election to make expenditures or to take action to
perform an obligation of Grantor under this Agreement, after Grantor's failure
to perform, shall not affect Lender's right to declare a default end exercise
its remedies.
JURY WAIVER. THE UNDERSIGNED AND LENDER (BY ITS ACCEPTANCE HEREOF) HEREBY
VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE
A JURY PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED UPON CONTRACT, TORT
OR OTHERWISE) BETWEEN OR AMONG THE UNDERSIGNED AND LENDER ARISING OUT OF OR IN
ANY WAY RELATED TO THIS DOCUMENT, THE RELATED DOCUMENTS, OR ANY RELATIONSHIP
BETWEEN OR AMONG THE UNDERSIGNED AND LENDER THIS PROVISION IS A MATERIAL
INDUCEMENT TO LENDER TO PROVIDE THE FINANCING EVIDENCED BY THIS DOCUMENT AND THE
RELATED DOCUMENTS.
MISCELLANEOUS PROVISIONS The following miscellaneous provisions are a part of
this Agreement:
Amendments. This Agreement, together with any Related Documents, constitutes the
entire understanding and agreement of the parties as to the matters set forth in
this Agreement. No alteration of or amendment to this Agreement shall be
effective unless given in writing end signed by the party or parties sought to
be charged or bound by the alteration or amendment.
Attorneys' Fees, Expenses. Grantor agrees to pay upon demand all of Lender's
costs and expenses, including Lender's attorneys' fees and Lender's legal
expenses, incurred in connection with the enforcement of this Agreement. Lender
may hire or pay someone else to help enforce this Agreement, and Grantor shall
pay the costs and expenses of such enforcement Costs and expenses include
Lender's attorneys' fees and legal expenses whether or not there is a lawsuit,
including attorneys' fees and legal expenses for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or injunction),
appeals, and any anticipated post-judgment collection services Grantor also
shall pay all court costs and such additional fees as may be directed by the
court.
Caption Headings. Caption headings in this Agreement are for convenience
purposes only and are not to be used to interpret or define the provisions of
this Agreement
Governing Law. This Agreement will be governed by, construed and enforced in
accordance with federal law and the laws of the State of Ohio This Agreement has
been accepted by Lender in the State of Ohio.
Choice of Venue If there is a lawsuit, Grantor agrees upon Lender's request to
submit to the jurisdiction of the courts of Allen County, State of Ohio
No Waiver by Lender. Lender shall not be deemed to have waived any rights under
this Agreement unless such waiver is given in writing and signed by Lender No
delay or omission on the part of Lender in exercising any right shall operate as
a waiver of such right or any other right A waiver by Lender of a provision of
this Agreement shell not prejudice or constitute a waiver of Lender's right
otherwise to demand strict compliance with that provision or any other provision
of this Agreement No prior waiver by Lender, nor any course of dealing between
Lender and Grantor, shall constitute a waiver of any of Lender's rights or of
any of Grantor's obligations as to any future transactions. Whenever the consent
of Lender is required under this Agreement, the granting of such consent by
Lender in any instance shall not constitute continuing consent to subsequent
instances where such consent is required and in all cases such consent may be
granted or withheld in the sole discretion of Lender
Notices. Any notice required to be given under this Agreement shall be given in
writing, and shall be effective when actually delivered, when actually received
by telefacsimile (unless otherwise required by law), when deposited with a
nationally recognized overnight courier, or, if mailed, when deposited in the
United States marl, as first class, certified or registered mail postage
prepaid, directed to the addresses shown near the beginning of this Agreement
Any party may change its address for notices under this Agreement by giving
formal written notice to the other parties, specifying that the purpose of the
notice is to change the party's address. For notice purposes, Grantor agrees to
keep Lender informed at all times of Grantor's current address Unless otherwise
provided or required by low, if there is more then one Grantor, any notice given
by Lender to any Grantor is deemed to be notice given to all Grantors
Power of Attorney Grantor hereby irrevocably appoints Lender as its true and
lawful attorney-in-fact, such power of attorney being coupled with en interest,
with full power of substitution to do the following in the place and steed of
Grantor and in the name of Grantor' (a) to demand, collect, receive, receipt
for, sue and recover all sums of money or other property which may now or
hereafter become due. owing or payable from the Collateral, (b) to execute, sign
and endorse any and all claims, instruments, receipts, checks, drafts or
warrants issued in payment for the Collateral, (c) to settle or compromise any
and all claims arising under the Collateral, and, in the place and stead of
Grantor, to execute and deliver its release and settlement for the claim: (d) to
file any claim or claims or to take any action or institute or take part in any
proceedings, either in is own name or in the name of Grantor, or otherwise,
which in the discretion of Lender may seem to be necessary or advisable; (e) to
execute any documents or instruments necessary to perfect or continue Lender's
security interest in the Collateral, and (f) to file such financing statements
(including filing carbon, photographic or other reproduction of any financing
statement or this Agreement for use as a financing statement) or other documents
or instruments to perfect or continue Lender's security interest in the
Collateral This power is given as security for the Indebtedness, and the
authority hereby conferred is and shall be irrevocable and shall remain in full
force and effect until renounced by Lender
Indemnity Grantor hereby agrees to indemnity, defend and hold harmless Lender,
and its officers, directors, shareholders. employees, agents and representatives
(each an "Indemnified Person") from and against any and all liabilities,
obligations, claims, losses, damages, penalties, actions, judgments. suites
costs, expenses or disbursements of any kind or nature (collectively, the
'Claims") which may be imposed on, incurred by or asserted against, any
Indemnified Person (whether or not caused by any Indemnified Person's sole,
concurrent or contributory negligence) arising in connection with this Agreement
or the Collateral (including, without limitation, the enforcement of this
Agreement and the Related Documents and the defense of any Indemnified Person's
action and/or inactions in connection with this Agreement and the Related
Documents), except to the limited extent that the Claims against the Indemnified
Person are proximately caused by such Indemnified Person's gross negligence or
willful misconduct The indemnification provided for in this Section shall
survive the termination of this Agreement and shall extend and continue to
benefit each individual or entity who is or has at any time been an indemnified
Person hereunder
Information Waiver Lender may provide, without any limitation whatsoever, to any
one or more purchasers, potential purchasers, or affiliates of BANK ONE
CORPORATION, any information or knowledge Lender may have about Grantor or about
any matter relating to this Agreement, and Grantor hereby waives any right to
privacy Grantor may have with respect to such matters
Severability. If a court of competent jurisdiction finds any provision of this
Agreement to be illegal, invalid, or unenforceable as to any circumstance, that
finding shall not make the offending provision illegal, invalid. or
unenforceable as to any other circumstance If feasible, the offending provision
shall be considered modified so that it becomes legal, valid and enforceable If
the offending provision cannot be so modified, it shall be considered deleted
from this Agreement Unless otherwise required by law, the illegality,
invalidity, or unenforceability of any provision of this Agreement shall not
affect the legality, validity or enforceability of any other provision of this
Agreement
Successors and Assigns. Subject to any limitations stated in this Agreement on
transfer of Grantor's interest, this Agreement shall be binding upon and inure
to the benefit of the parties, their successors and assigns. If ownership of the
Collateral becomes vested in a person other then Grantor, Lender, without notice
to Grantor, may deal with Grantor's successors with reference to this Agreement
and the Indebtedness by way of forbearance or extension without releasing
Grantor from the obligations of this Agreement or liability under the
Indebtedness
Survival of Representations and Warranties. All representations, warranties, and
agreements made by Grantor in this Agreement shall survive the execution and
delivery of this Agreement, shall be continuing in nature, and shall remain in
full force and effect until such time as Grantor's Indebtedness shall be paid in
full
Time Is of the Essence Time is of the essence in the performance of this
Agreement.
DEFINITIONS, The following capitalized words and terms shall have the following
meanings when used in this Agreement. Unless specifically stated to the
contrary, all references to dollar amounts shall mean amounts in lawful money of
the United States of America. Words and terms used in the singular shall include
the plural, and the plural shall include the singular, as the context may
require Words and terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Ohio Uniform Commercial Code
Agreement. The word "Agreement" means this Commercial Security Agreement, as
this Commercial Security Agreement may be amended or modified from time tv time,
together with all exhibits end schedules attached to INS Commercial Security
Agreement from time to time,
Borrower. The word "Borrower" means Engineered Wire Products, Inc., and all
other persons and entities signing the Note in whatever capacity
Collateral. The word "Collateral" means all of Grantor's right, title and
interest in and to all the Collateral as described in the Collateral Description
section of this Agreement
Default. The word "Default" means the Default set forth in this Agreement in the
section titled 'Default"
Environmental Laws The words "Environmental Laws" mean any and all federal,
state, local and foreign statutes, judicial decisions, regulations, ordinances,
rules, judgments, orders, decrees, plans, injunctions, permits, concessions,
grants, franchises, licenses, agreements and other governmental restrictions
relating to (i) the protection of the environment, (ii) the effect of the
environment on human health, (iii) emissions, discharges or releases of
pollutants, contaminants, hazardous substances or wastes into surface water,
ground water or land, or liv) the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of pollutants, contaminants,
hazardous substances or wastes or the cleanup or other remediation thereof
Event of Default The words "Event of Default" mean any of the Events of Default
set forth in this Agreement in the Default section of this Agreement.
Grantor The word "Grantor' means Engineered Wire Products, Inc
Hazardous Substances. The words "Hazardous Substances" mean all explosive or
radioactive substances or wastes and all hazardous or toxic substances, wastes
or other pollutants, including petroleum or petroleum distillates, asbestos or
asbestos containing materials, polychlorinated biphenyls, radon gas, infectious
or medical wastes and all other substances or wastes of any nature regulated
pursuant to any Environmental Law.
Indebtedness. The word "Indebtedness' means the indebtedness evidenced by the
Note or Related Documents, including all principal and interest together with
all other indebtedness and costs and expenses for which Grantor is responsible
under this Agreement or under any of the Related Documents, In addition, and
without imitation, the term "Indebtedness" Includes all amounts Identified In
the Cross Collateralization and Future Advances paragraphs as contained in one
or more of the Related Documents
Lender The word "Lender" means Bank One, N.A. with its main office at Columbus,
Ohio, its successors and assigns Note. The word "Note" means the Note executed
by Grantor In the principal amount of 86,750.000,00 dated January 5, 2004,
together with all renewals of, extensions of, modifications of, refinancings of,
consolidations of, and substitutions for the note or credit agreement
Related Documents. The words "Related Documents" mean all promissory notes,
credit agreements, loan agreements, environmental agreements, guaranties,
security agreements, mortgages, deeds of trust, security deeds, collateral
mortgages, and all other instruments, agreements and documents, whether now or
hereafter existing, executed in connection with the indebtedness.
GRANTOR HAS READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS COMMERCIAL SECURITY
AGREEMENT AND AGREES TO ITS TERMS. THIS AGREEMENT IS DATED JANUARY 5, 2004.
GRANTOR
ENGINEERED WIRE PRODUCTS, INC.
By: s/s Bert E Downing, Jr., Vice Prow Engineered Wire Products, Inc.