Exhibit
10.2
SECURITY
AGREEMENT
THIS SECURITY AGREEMENT
(this " Agreement ") is entered into as of June 10, 2009
among the parties identified as "Obligors" on the signature pages
hereto and such other parties that may become Obligors hereunder
after the date hereof (each individually an " Obligor " and
collectively the " Obligors ") and Bank of America, N.A.
(the " Lender ").
RECITALS
WHEREAS, pursuant to the
Amended and Restated Credit Agreement (as amended, modified,
supplemented, increased, extended, restated, refinanced and
replaced from time to time, the " Credit Agreement ") dated
as of the date hereof among American Woodmark Corporation, a
Virginia corporation (the " Borrower "), the Guarantors
identified therein and the Lender, the Lender has agreed to make
Loans and issue Letters of Credit upon the terms and subject to the
conditions set forth therein; and
WHEREAS, this Agreement
is required pursuant to the Credit Agreement.
NOW, THEREFORE, in
consideration of these premises and other good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1.
Definitions .
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(a)
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Capitalized terms used and not
otherwise defined herein shall have the meanings ascribed to such
terms in the Credit Agreement.
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(b)
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The following terms shall have the
meanings ascribed to such terms in the Uniform Commercial Code in
effect from time to time in the Commonwealth of Virginia except as
such terms may be used in connection with the perfection of the
Collateral and then the applicable jurisdiction with respect to
such affected Collateral shall apply (the "UCC"): Accession,
Account, As-Extracted Collateral, Chattel Paper, Documents,
Consumer Goods, Farm Products, Instrument, Inventory, Manufactured
Home, Proceeds, Supporting Obligations and Tangible Chattel
Paper.
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2.
Grant of Security Interest in the Collateral . To secure the
prompt payment and performance in full when due, whether by lapse
of time, acceleration, mandatory prepayment or otherwise, of
the
Obligations, each Obligor hereby grants to the Lender a continuing
security interest in, and a right to set off against, any and all
right, title and interest of such Obligor in and to all of the
following, whether now owned or existing or owned, acquired, or
arising hereafter (collectively, the " Collateral "): (a)
all Accounts; (b) all Chattel Paper evidencing any Account that
constitutes Collateral; (c) all Documents relating to any Inventory
that constitutes Collateral; (d) all Instruments evidencing any
Account that constitutes Collateral; (e) all Inventory; (f)all
Supporting Obligations supporting the payment or performance of any
Account, Chattel Paper, Document or Instrument that constitutes
Collateral; and (g) all Accessions and all Proceeds of any and all
of the foregoing.
The Obligors and the
Lender hereby acknowledge and agree that the security interest
created hereby in the Collateral constitutes continuing collateral
security for all of the Obligations, whether now existing or
hereafter arising.
3.
Representations and Warranties . Each Obligor hereby
represents and warrants to the Lender that:
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(a)
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Ownership
. Each Obligor is the
legal and beneficial owner of its Collateral and has the right to
pledge, sell, assign or transfer the same.
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(b)
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Security
Interest/Priority . This Agreement creates a valid
security interest in favor of the Lender in the Collateral of such
Obligor and, when properly perfected by filing, shall constitute a
valid and perfected, first priority security interest in such
Collateral to the extent such security interest can be perfected by
filing under the UCC, free and clear of all Liens except for
Permitted Liens.
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(c)
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Types of Collateral
. None of the Collateral
consists of, or is the Proceeds of, As-Extracted Collateral,
Consumer Goods, Farm Products, Manufactured Homes or standing
timber.
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(d)
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Consents: Etc.
Except for the filing
or recording of UCC financing statements and consents,
authorizations, filings or other actions which have been obtained
or made, no consent or authorization of, filing with, or other act
by or in respect of, any arbitrator or Governmental Authority and
no consent of any other Person (including, without limitation, any
stockholder, member or creditor of such Obligor), is required for
(A) the grant by such Obligor of the security interest in the
Collateral of such Obligor granted hereby or for the execution,
delivery or performance of this Agreement by such Obligor, (B) the
perfection of such security interest (to the extent such security
interest can be perfected by filing under the UCC) or (C) the
exercise by the Lender of the rights and remedies provided for in
this Agreement.
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4.
Covenants . Each Obligor covenants that until such time as
the Obligations arising under the Loan Documents have been paid in
full and the Commitments have expired or been terminated, such
Obligor
shall:
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(a)
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Instruments/Chattel Paper
. If any amount payable
under or in connection with any of the Collateral shall be or
become evidenced by any Instrument or Tangible Chattel Paper, or if
any property constituting Collateral shall be stored or shipped
subject to a Document, ensure that such Instrument, Tangible
Chattel Paper or Document is either in the possession of such
Obligor at all times or, if requested by the Lender to perfect its
security interest in such Collateral, is delivered to the Lender
duly endorsed in a manner satisfactory to the Lender. Such Obligor
shall ensure that any Collateral consisting of Tangible Chattel
Paper is marked with a legend acceptable to the Lender indicating
the Lender's security interest in such Tangible Chattel
Paper.
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(b)
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Further Assurances
. Each Obligor shall
execute and deliver to the Lender such agreements, assignments or
instruments and do all such other things as the Lender may
reasonably deem necessary or appropriate (i) to assure to the
Lender its security interests hereunder, including such instruments
as the Lender may from time to time reasonably request in order to
perfect and maintain the security interests granted hereunder in
accordance with the UCC, (ii) to consummate the transactions
contemplated hereby and (iii) to otherwise protect and assure the
Lender of its rights and interests hereunder.
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5.
Authorization to File
Financing Statements . Each Obligor hereby authorizes the
Lender to prepare and file such financing statements (including
continuation statements) or amendments thereof or supplements
thereto or other instruments as the Lender may from time to time
reasonably deem necessary or appropriate in order to perfect and
maintain the security interests granted hereunder in accordance
with the UCC.
6.
Advances. On failure of any Obligor to perform any of the
covenants and agreements contained herein, the Lender may, at its
sole option and in its sole discretion, after providing written
notice to
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the Obligors, perform
the same and in so doing may expend such sums as the Lender may
reasonably deem advisable in the performance thereof, including,
without limitation, the payment of any insurance premiums, the
payment of any taxes, a payment to obtain a release of a Lien or
potential Lien, expenditures made in defending against any adverse
claim and all other expenditures which the Lender may make for the
protection of the security hereof or which may be compelled by
operation of Law. All such sums and amounts so expended shall be
repayable by the Obligors on a joint and several basis promptly
upon timely notice thereof and demand therefor, shall constitute
additional Obligations and shall bear interest from the date said
amounts are expended at the Default Rate. No such performance of
any covenant or agreement by the Lender on behalf of any Obligor,
and no such advance or expenditure therefor, shall relieve the
Obligors of any Default or Event of Default. The Lender may make
any payment hereby authorized in accordance with any bill,
statement or estimate procured from the appropriate public office
or holder of the claim to be discharged without inquiry into the
accuracy of such bill, statement or estimate or into the validity
of any tax assessment, sale, forfeiture, tax lien, title or claim
except to the extent such payment is being contested in good faith
by an Obligor in appropriate proceedings and against which adequate
reserves are being maintained in accordance with GAAP.
7.
Remedies .
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(a)
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General Remedies
. If an Event of Default
has occurred and is continuing, the Lender shall have, in addition
to the rights and remedies provided herein, in the Loan Documents,
in any other documents relating to the Obligations, or by Law
(including, but not limited to, levy of attachment, garnishment and
the rights and remedies set forth in the UCC of the jurisdiction
applicable to the affected Collateral), the rights and remedies of
a secured party under the UCC (regardless of whether the UCC is the
law of the jurisdiction where the rights and remedies are asserted
and regardless of whether the UCC applies to the affected
Collateral), and further, the Lender may, with or without judicial
process or the aid and assistance of others, (i) enter on any
premises on which any of the Collateral may be located and, without
resistance or interference by the Obligors, take possession of the
Collateral, (ii) dispose of any Collateral on any such premises,
(iii) require the Obligors to assemble and make available to the
Lender at the expense of the Obligors any Collateral at any place
and time designated by the Lender which is reasonably convenient to
both parties, (iv) remove any Collateral from any such premises for
the purpose of effecting sale or other disposition thereof, and/or
(v) without demand and without advertisement, notice, hearing or
process of law, all of which each of the Obligors hereby waives to
the fullest extent permitted by Law, at any place and time or
times, sell and deliver any or all Collateral held by or for it at
public or private sale, at any exchange or broker's board or
elsewhere, by one or more contracts, in one or more parcels, for
cash, upon credit or otherwise, at such prices and upon such terms
as the Lender deems advisable, in its sole discretion (subject to
any and all mandatory legal requirements). Each Obligor
acknowledges that any such private sale may be at prices and on
terms less favorable to the seller than the prices and other terms
which might have been obtained at a public sale and,
notwithstanding the foregoing, agrees that such private sale shall
be deemed to have been made in a commercially reasonable manner.
Neither the Lender's compliance with applicable Law nor its
disclaimer of warranties relating to the Collateral shall be
considered to adversely affect the commercial reasonableness of any
sale. To the extent the rights of notice cannot be legally waived
hereunder, each Obligor agrees that any requirement of reasonable
notice shall be met if such notice, specifying the place of any
public sale or the time after which any private sale is to be made,
is personally served on or mailed, postage prepaid, to the Loan
Parties in accordance with the notice provisions of Section
10.02 of the
Credit Agreement at least 10 days before the time of sale or other
event giving rise to the requirement of such notice. The Lender may
adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which
it was so adjourned The Lender shall not be obligated to make any
sale or other disposition of the Collateral regardless of notice
having been given. To the extent permitted by applicable Law, any
holder of any of the Obligations may be a purchaser at any such
sale. To the extent permitted by applicable Law, each of the
Obligors hereby waives all of its rights of redemption with respect
to any such sale. Subject to the provisions of applicable Law, the
Lender may postpone or cause the postponement of the sale of all or
any portion of the Collateral by announcement at the time and place
of such sale, and such sale may, without further notice, to the
extent permitted by Law, be made at the time and place to which the
sale was postponed, or the Lender may further postpone such sale by
announcement made at such time and place.
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(b)
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Remedies relating to
Accounts . If
an Event of Default has occurred and i
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