Security Agreement (2007)Full Document 

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Security Agreement


SECURITY AGREEMENT

SECURITY AGREEMENT (this “Agreement”), dated as of April 30, 2007, made by 1201/5400 Elm Corporation, a Delaware corporation (including any permitted successors and assigns, the “Grantor”), in favor of Bank of America, N.A., as Administrative Agent (“Administrative Agent”), for the ratable benefit of each Secured Lender (as hereinafter defined) (the Administrative Agent in said capacity, herein also referred to, from time to time, as the “Secured Party”).

BACKGROUND.

A. Bank of America, N.A., as the Administrative Agent, Swing Line Lender and L/C Issuer, the Lenders party thereto, and Chaparral Steel Company, a Delaware corporation (the “Borrower”) entered into the Credit Agreement dated as of June 16, 2005 (said Credit Agreement, as it may be amended, restated, extended, supplemented or otherwise modified in writing from time to time, being the “Credit Agreement”).

B. It is the intention of the parties hereto that this Agreement create a first priority security interest in certain property of the Grantor in favor of the Secured Party for the ratable benefit of the Secured Lenders securing the payment and performance of the Secured Obligations.

C. It is a requirement of Section 6.13 of the Credit Agreement that the Grantor shall have executed and delivered this Agreement.

AGREEMENT.

NOW, THEREFORE, in consideration of the premises set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in order to induce certain of the Secured Lenders to continue to make the Loans and L/C Issuer to issue Letters of Credit under the Credit Agreement and to extend other credit accommodations under the Loan Documents, the Grantor hereby agrees with the Secured Party, for the ratable benefit of the Secured Lenders, as follows:

ARTICLE I.

DEFINITIONS

Section 1.1 Definitions. For purposes of this Agreement:

Account” means all right, title, and interest of the Grantor (in each case whether now or hereafter existing, owned, arising, or acquired) in and to an account (as defined in the UCC), and (whether or not included in such definition), a right to payment of a monetary obligation, whether or not earned by performance for property that has been or is to be sold, leased, licensed, assigned, or otherwise disposed of, and for service rendered or to be rendered, and all right, title, and interest in any returned property, together with all rights, titles, securities, and guarantees with respect thereto, including any rights to stoppage in transit, replevin, reclamation, and

 

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resales, and all related Liens whether voluntary or involuntary.

Account Debtor” means any Person who is or who may become obligated to the Grantor under, with respect to or on account of an Account.

Chattel Paper” means all right, title, and interest of the Grantor (in each case whether now or hereafter existing, owned, arising, or acquired) in and to chattel paper (as defined in the UCC), and (whether or not included in such definition), a Record or Records that evidence both a monetary obligation and a security interest in specific Goods, a security interest in specific Goods and Software used in the Goods, or a lease of specific Goods.

Collateral” means all (a) Accounts and all Software used in the management thereof, (b) Chattel Paper and Instruments related to or arising out of the disposition of Accounts or Inventory, (c) Inventory, (d) all contract rights relating to the lease, sale or other disposition of Accounts and Inventory, (e) all General Intangibles related to or arising out of the disposition of Accounts or Inventory, (f) Pledged Equity Interests, and (g) Proceeds of the foregoing.

Electronic Chattel Paper” means all right, title, and interest of the Grantor (in each case whether now or hereafter existing, owned, arising, or acquired) in and to electronic chattel paper (as defined in the UCC), and (whether or not included in such definition), chattel paper evidenced by a Record or Records consisting of information stored in electronic medium.

General Intangible” means all right, title, and interest of the Grantor (in each case whether now or hereafter existing, owned, arising, or acquired) in and to a general intangible (as defined in the UCC), and (whether or not included in such definition) all personal property, including things in action, other than Accounts, Chattel Paper, commercial tort claims, deposit accounts, documents, Goods, Instruments, investment property, letter-of-credit rights, letters of credit, money, and oil, gas or other minerals before extraction.

Goods” means all right, title, and interest of the Grantor (in each case whether now or hereafter existing, owned, arising, or acquired) in and to goods (as defined in the UCC), and (whether or not included in such definition), all things that are movable when a security interest attaches.

Governmental Authority” means any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, administrative tribunal, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government, and any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing.

Instrument” means all right, title, and interest of the Grantor (in each case whether now or hereafter existing, owned, arising, or acquired) in and to an instrument (as defined in the UCC), and (whether or not included in such definition), a negotiable instrument or any other writing that evidences a right to the payment of a monetary obligation, is not itself a security agreement or lease, and is of a type that in ordinary course of business is transferred by delivery with any necessary indorsement or assignment.

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