EXHIBIT 10.18(c)
SECURITY AGREEMENT
KNOW ALL MEN BY THESE PRESENTS:
That OTTAWA RIVER STEEL CO., an Ohio corporation, having an address at
000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxx 00000 (the "Debtor"), in consideration of the
principal sum of Six Hundred Eighteen Thousand and 00/00 Dollars ($618,000.00),
plus interest thereon as provided in its Cognovit Demand Promissory Note of even
date, together with any renewals, substitutions, replacements and extensions
thereof (the "Note"), which is unconditionally guaranteed by MERIDIAN NATIONAL
CORPORATION, a Delaware Corporation, pursuant to an Unconditional Cognovit
Guaranty of even date (the "Unconditional Guaranty"), with respect to a loan
made to Debtor by XXXXXXX X. XXXXXXX, whose address is c/o Meridian National
Corporation, 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxx 00000 (the "Secured Party" or
"Lender"), and to induce and secure the aforesaid loan and any extensions or
renewals thereof and any and all other liabilities of Debtor to Secured Party,
direct or indirect, absolute or contingent, due or to become due, now existing
or hereafter arising, including arising out of the Note (collectively, the
"Indebtedness") and of other good and valuable considerations inuring to the
benefit of Debtor, does hereby grant to the Secured Party a security interest in
all the equipment (the "Equipment") located at the Debtor's facility at 0000
Xxxxxxxxx Xx., Xxxxxxx, Xxxxxxxx 00000 (the "Premises"), including but not
limited to the Equipment more particularly described on Exhibit A hereto, and
including Equipment attached as fixtures to the real property described on
Exhibit B hereto (the "Collateral").
DEBTOR HEREBY WARRANTS AND AGREES:
1. (a) All of the Equipment shall be kept at the Premises and shall be
used by Debtor in the operations of the business of Debtor. Debtor will not
remove nor allow the removal of the Equipment from said location without the
prior written consent of Secured Party. Some of the Equipment described in
Exhibit A is attached to the underlying real estate.
(b) Debtor is now in title and possession of the Equipment and it is in
good condition and repair. Debtor shall maintain the Equipment in good condition
and repair, reasonable wear and tear alone excepted, and Secured Party may, at
Debtor's expense, pay all necessary expenses to maintain the Equipment in good
repair, the cost thereof to be a part of the Indebtedness.
(c) Debtor will at all times maintain insurance on the Equipment in
such amounts and types and with such companies as the Secured Party may from
time to time require. The insurance policy or policies shall be delivered to
Secured Party with an endorsement or loss payable clause in favor of Secured
Party as its interest may appear. Upon Debtor's failure to comply with any of
the provisions of this Paragraph, Secured Party may, at
Debtor's expense, procure such insurance, the cost thereof to be a part of the
Indebtedness.
(d) Debtor will not transfer, rent, sublet assign, sell or encumber any
of the Equipment without the prior written consent of Secured Party, and Debtor
will not use or permit the same to be used in violation of any law or ordinance
of any governmental authority.
(e) Debtor will, upon acquiring any new or additional Equipment,
promptly notify Secured Party of such acquisition, stating the nature,
description, cost and amount of such Equipment so acquired; and it will, upon
demand by Secured Party at Debtor's expense, promptly execute and deliver to
Secured Party such additional security agreements, financing statements or other
documents with respect thereto as are required by Secured Party. Nothing in this
Paragraph is intended to limit the right of Secured Party in any after-acquired
property as security for the Indebtedness created pursuant to the Note.
IT IS AGREED THAT:
2. The Collateral now is and will at all times hereafter be free and
clear from any and all other security interests, liens and encumbrances. Debtor
will pay when due all taxes and assessments upon the same and will promptly
satisfy any and all liens that may be imposed upon or against the same and
defend the same against all claims and demands of third persons whatever. Upon
Debtor's failure to comply with any of the provisions of this Paragraph, Secured
Party may, at Debtor's expense, pay such taxes and assessments, the cost thereof
to be part of the Indebtedness.
3. Without the written consent of Secured Party, Debtor will not permit
any adverse financing statements covering the Collateral to be on file in any
public office.
4. Debtor will furnish to Secured Party from time to time upon request
written statements and schedules identifying and describing the Collateral and
any additions thereto and substitutions thereof, in such detail as Secured Party
may reasonably require, will maintain books and records pertaining to the
Collateral in such detail, form and scope as Secured Party shall reasonably
require, and will advise Secured Party promptly and in sufficient detail of any
substantial change in the Collateral and of the occurrence of any event which
would have any material adverse effect on the value of Collateral or on the lien
and security interest granted to Secured Party therein.
5. Upon reasonable notice, Debtor will give Secured Party and its
officers, agents or attorneys free and complete access at all reasonable times
to the place of
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business, property, ledgers, records and books of Debtor and to the Collateral;
and Debtor will keep records relating to the Collateral as required by Secured
Party.
6. No action taken by Secured Party shall be taken as authority to
sell, transfer, convey or assign any Collateral contrary to the terms of this
Agreement.
7. Any warranty or representation made by Debtor to Secured Party with
respect to the Collateral covered by this Agreement shall be deemed to be made
as of the date of this Agreement, or as of the date at which Debtor acquired
rights in the Collateral within the meaning of the Uniform Commercial Code as
adopted in the State of Michigan (the "Code"), whichever is later.
8. Debtor shall be in default of this Agreement at such time as it is
in default of the Note. In the event of such default by Debtor, Secured Party
shall have, in addition to those rights granted it by the Note, and in addition
to all other rights of a secured party under the Code, the right to require
Debtor, upon request by Secured Party, to assemble the Collateral and make it
available to Secured Party at a place designated by Secured Party which is
reasonably convenient to both parties, and the right to take possession of the
Collateral with or without demand and with or without process of law and the
right to sell and dispose of the same and distribute the proceeds according to
law. In order to take possession of the Collateral, Secured Party may, so far as
Debtor can give authority therefor, enter upon the Premises on which the
Collateral or any part thereof may be situated and remove the same therefrom, to
the extent not prohibited by law, Debtor hereby voluntarily waives with full
knowledge and understanding all rights under the Constitution of the United
States and under the Constitution and statutes of the State of Ohio and Michigan
which it might have to notice and to an opportunity for a hearing prior to
Secured Party's taking possession of the Collateral.
9. This Security Agreement is without prejudice to the right of Secured
Party to enforce collection of the Indebtedness when due and payable, by suit or
in any lawful manner or to resort to any other security for the payment of the
Indebtedness, this Security Agreement being additional, accumulative and
concurrent for security for payment of the Indebtedness. The enumeration of
certain rights, privileges and options in this Security Agreement as vested in
Secured Party, or its successors and assigns, is not and shall not be construed
as a waiver of, nor to impair in any way other rights of Secured Party, or its
successors or assigns, either at law or in equity, independent of this
instrument, concerning this or any of the liabilities, obligations,
indebtedness, or collateral security involved in the Indebtedness or any other
instrument securing the Indebtedness. Secured Party, its successors and assigns,
shall have the right to proceed against the security granted hereunder or any
other security granted for the payment of the Indebtedness and to
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proceed against all security at the same time or against individually pledged or
liened assets from time to time at the sole election of Secured Party. No action
against any specific security granted for the Indebtedness shall be a bar to any
subsequent action or actions against all or any other security granted for the
Indebtedness.
10. This Agreement is made pursuant to the provisions of the Code, and
adopts where applicable definitions contained in the Code. Secured Party shall
have and be entitled to each right, privilege and remedy to which a secured
party is entitled under provisions of the Code, as if made a part hereof and
fully rewritten herein. Written notice mailed to Debtor's address stated herein
shall constitute reasonable notice to the Debtor of any disposition of
Collateral, if mailed at least five (5) days prior to such disposition, and
Secured Party may buy in the Collateral at any private sale.
11. The lien, rights and security interest granted to Secured Party
herein are to continue in full force and effect, notwithstanding the termination
of this Agreement or the fact that the principal account maintained in Debtor's
name on Secured Party's books may from time to time be temporarily in a credit
position, until the final payment to Secured Party in full of all obligations
and Indebtedness due Secured Party by Debtor, together with interest thereon.
12. This Agreement shall be binding upon Debtor, its successors and
assigns and shall be binding upon Secured Party, and inure to the benefit of
Secured Party, and its successors and assigns.
13. No waiver by Secured Party of any default in the performance of any
provision of this Agreement or other instrument of Indebtedness secured hereby
to be performed by Debtor shall waive any other default to the same or different
provisions hereof.
14. If any provisions of this Agreement, or if the evidence of
Indebtedness is contrary to the laws of any state, the same shall not invalidate
the other provisions thereof.
15. Debtor will at any time join with Secured Party in executing one or
more financing statements, amendments or supplements thereto, or any and all
continuation statements as may be required by Secured Party, pursuant to the
Uniform Commercial Code in form satisfactory to Secured Party and will pay the
cost of filing same or filing or recording this Agreement in all public offices
where filing or recording is deemed by Secured Party to be necessary or
desirable. In the event Debtor fails, for a period of three (3) days, to
execute, acknowledge and deliver any of the aforementioned financing statements,
amendments thereof, supplements thereto or continuation statements, in
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addition to any other remedies for a breach or default as set forth herein or as
set forth in any other document executed by Debtor with Secured Party, Secured
Party may execute and do all things necessary to execute the aforementioned
financing statements, amendments thereof, supplements thereto or continuation
statements as herein provided as the agent or attorney-in-fact for all such
purposes. The foregoing constitution and appointment is coupled with an interest
and Debtor agrees to execute, at any time, any and all further documents as
Secured Party deems necessary to effectuate such constitution and appointment.
16. The parties covenant and agree that the security interests herein
granted to Secured Party in the Collateral as hereinbefore defined shall extend
to all Collateral hereafter acquired by Debtor.
17. As between the parties, this Agreement is part and parcel of a
single agreement consisting of this instrument, the Note and any and all
mortgages and documents made pursuant thereto; all of said agreements,
instruments, notes and/or documents to be read as a whole in determining the
entire agreement and intent of the parties.
18. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO
TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (1) ARISING UNDER
THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR
DELIVERED IN CONNECTION HEREWITH, OR (2) IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO
THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR
DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO,
IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN
CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT
ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT
TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
19. All documents executed pursuant to the transactions contemplated
herein shall be deemed to be contracts made under, and for all purposes shall be
construed in accordance with, the internal laws and judicial decisions of the
State of Ohio. Debtor hereby submits to the jurisdiction of the state and
federal courts of Ohio for the purposes of
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resolving disputes hereunder or for the purposes of collection. For the purposes
of service of process, Debtor agrees to accept service of process out of any of
the before mentioned courts in any such dispute or collection action by
registered or certified mail addressed to Debtor at the address set forth in the
introductory paragraph hereof. Secured Party reserves the right to serve process
on Debtor according to any other legal method. Debtor hereby agrees not to raise
as a defense in any action brought in any court in Ohio the defense of an
inconvenient forum.
Agreed to and signed this 4th day of February, 1999, in the City of
Toledo, State of Ohio.
SECURED PARTY: DEBTOR:
OTTAWA RIVER STEEL CO.
By /s/ Xxxxxxx X. Xxxxxxx By /s/ Xxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxxx Xxxxx X. Xxxxxx, Vice President,
Finance
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