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AMENDED AND RESTATED INTERCREDITOR AGREEMENT
AMENDED AND RESTATED INTERCREDITOR AGREEMENT (the "Agreement"), dated
as of December 18, 1997, by and among ACME METALS INCORPORATED, a Delaware
corporation, having its principal place of business at ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (together with its successors and assigns, "AMI"),
ACME STEEL COMPANY, a Delaware corporation having its principal place of
business at ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (together with
its successors and assigns, the "Company"), ▇▇▇▇▇▇ Trust and Savings Bank, an
Illinois banking corporation with its mailing address at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, as agent (in such capacity and together with its
successors and assigns in such capacity, the "Working Capital Facility Agent")
for the Banks (as hereinafter defined), and State Street Bank and Trust Company,
a national banking association, having an address at ▇▇▇▇▇▇▇ Square, ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, as collateral agent (in such
capacity and together with its successor and assigns in such capacity, the
"Collateral Agent") for the Senior Note Secured Parties (as hereinafter
defined).
R E C I T A L S :
1. Pursuant to that certain indenture (as amended by the First
Supplemental Indenture dated as of December 3, 1997 (the "First Supplemental
Note Indenture") and as otherwise amended and restated, supplemented or
otherwise modified from time to time, the "Note Indenture"), dated as of August
11, 1994, by and among AMI, the Company, as subsidiary guarantor of AMI's
obligations, each of the other subsidiaries of AMI, as guarantors (collectively,
the "Guarantors") of AMI's obligations, and State Street Bank and Trust Company
(as successor to Shawmut Bank Connecticut), as trustee (in such capacity and
together with its successors and assigns in such capacity, the "Note Trustee")
for the holders of the Senior Secured Notes (as hereinafter defined), AMI issued
its 12 1/2% senior secured notes due 2002 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the "Senior Secured
Notes") in the aggregate principal amount of $125,000,000.
2. Pursuant to that certain indenture (as amended by the First
Supplemental Indenture dated December 3, 1997 (together with the First
Supplemental Note Indenture, the "First Supplemental Indentures") and as
otherwise amended and restated, supplemented or otherwise modified from time to
time, the "Discount Note Indenture"; together with the Note Indenture, the
"Indentures"), dated as of August 11, 1994, by and among AMI, the Company, the
other Guarantors and State Street Bank and Trust Company (as successor to
Shawmut Bank Connecticut), as trustee (in such capacity and together with its
successors and assigns in such capacity, the "Discount Note Trustee"; together
with the Note Trustee, the "Trustees") for the holders of the Senior Secured
Discount Notes (as hereinafter defined), AMI issued its 13 1/2% senior secured
discount notes due 2004 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the "Senior Secured Discount Notes";
together with the Senior Secured Notes, the "Notes") in the initial aggregate
principal amount of $117,958,000.
3. Pursuant to that certain Credit Agreement (the "Working Capital
Facility Credit Agreement"), dated as of August 11, 1994, among the Working
Capital Facility Agent, the
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lenders party thereto (collectively, including parties subsequently becoming
lenders pursuant thereto, the "Banks"), AMI, the Company, Acme Packaging
Corporation, a Delaware corporation, Alpha Tube Corporation, a Delaware
corporation, and Universal Tool and Stamping Company, Inc., an Indiana
corporation (together with the other agreements executed in connection with the
Working Capital Facility Credit Agreement referred to above among such entities,
and as amended, amended and restated, supplemented or otherwise modified from
time to time, the "Working Capital Facility"), the Banks agreed to make certain
loans and advances from time to time to the borrowers under the Working Capital
Facility.
4. Pursuant to that certain term loan agreement (as amended, amended
and restated, supplemented or otherwise modified from time to time, the
"Existing Term Loan Agreement"), dated as of August 4, 1994, by and among AMI,
▇▇▇▇▇▇ Trust and Savings Bank, as agent, and the lenders party thereto, AMI
borrowed $50,000,000.
5. AMI has purchased, pursuant to a Tender Offer and Consent
Solicitation Statement dated November 13, 1997, a portion of the Senior Secured
Notes and a portion of the Senior Secured Discount Notes and, as of the date
hereof, the outstanding principal amount of Senior Secured Notes is $117,513,000
and the outstanding principal amount of Senior Secured Discount Notes is
$669,000.
6. The parties to the Working Capital Facility Credit Agreement have
entered into an Amended and Restated Working Capital Facility Credit Agreement,
dated as of December 18, 1997 (together with the other agreements executed in
connection with the Amended and Restated Working Capital Facility Credit
Agreement referred to above among such entities, and as amended, amended and
restated, supplemented or otherwise modified from time to time, the "New Working
Capital Facility").
7. The Existing Term Loan Agreement and all related instruments and
agreements have been paid in full and AMI has been discharged of all its
obligations thereunder and in accordance with the terms thereof.
8. Pursuant to the First Supplemental Indentures, AMI is permitted to
grant liens securing indebtedness ranking pari passu with the Notes and, in
accordance therewith, AMI entered into that certain credit agreement (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the "Credit Agreement"), dated as of December 18, 1997, by and among AMI,
the lenders from time to time party thereto (the "Lenders"), Bankers Trust
Company, as administrative agent (the "Administrative Agent"), and ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Senior Funding, Inc., as Syndication Agent and Arranger, under which AMI
is borrowing $175,000,000.
9. The Collateral Agent is the collateral agent under that certain
amended and restated collateral agency agreement (the "Collateral Agency
Agreement"), dated as of December 18, 1997, for the Trustees (for the benefit of
the holders of the Notes), the Administrative Agent (for the benefit of the
Lenders) and such other parties which may from time to time become additional
lenders to AMI, the Company and/or the other Guarantors (each such lender, an
"Additional Secured Party" and collectively, the "Additional Secured Parties";
together with the
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Trustees, the Administrative Agent and the Collateral Agent, the "Senior Note
Secured Parties") which may, in accordance with the provisions of the definition
of "Permitted Liens" in each Indenture and the Credit Agreement as all are in
effect on the date hereof, take a security interest in the Shared Collateral (as
defined in the Collateral Agency Agreement) to secure the financing provided by
the Additional Secured Parties (such financing as described in the Credit
Agreement, the "Additional Senior Debt").
10. To secure the payment and performance of the Noteholder Claim (as
hereinafter defined), the Company has granted mortgage liens on and security
interests in the Noteholder Collateral (as hereinafter defined) to the
Collateral Agent for the benefit of the Senior Note Secured Parties.
11. To secure the payment and performance of the Bank Claim (as
hereinafter defined), the Company has granted security interests in and liens on
the Bank Collateral (as hereinafter defined) to the Working Capital Facilities
Agent for the benefit of the Banks.
12. AMI, the Company, the Working Capital Facility Agent and the
Collateral Agent executed and delivered a certain intercreditor agreement (the
"Intercreditor Agreement"), dated August 11, 1994, to evidence their agreement
in respect of their relative rights with respect to the Collateral (as
hereinafter defined) and certain other rights, priorities and interests under
the Working Capital Facility, the Indentures and the Term Loan Agreement and the
other documents executed in connection therewith.
13. The parties hereto are executing and delivering this Amended and
Restated Intercreditor Agreement to amend and restate the terms and conditions
of the Intercreditor Agreement to reflect (i) the termination of the Existing
Term Loan Agreement, (ii) the establishment of the New Working Capital Facility
and (iii) the execution and delivery of the Credit Agreement and the instruments
and agreements related thereto.
A G R E E M E N T :
In consideration of the foregoing and the mutual covenants herein
contained, and for other good and valuable consideration, the parties hereby
agree as follows:
I. DEFINITIONS
Definitions. Unless otherwise defined herein, the following terms shall
have the meanings specified below:
"Accounts" shall mean all of the Company's presently existing and
hereafter arising or acquired accounts, accounts receivable, margin accounts,
futures positions, book debts, instruments, documents, contracts, contract
rights, choses-in-action, notes, drafts, acceptances, chattel paper, and other
forms of obligations and receivables now or hereafter owned or held by or
payable to the Company relating in any way to Inventory or arising from the sale
of Inventory or the rendering of services by the Company, including the right to
payment of any interest or
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finance charge with respect thereto, together with all merchandise represented
by any of the accounts; all such merchandise that may be reclaimed or
repossessed or returned to the Company; all of the Company's rights as an unpaid
vendor, including stoppage in transit, reclamation, replevin and sequestration;
all pledged assets and all letters of credit, guaranty claims, liens, and
security interests held by or granted to the Company to secure payment of any
accounts and which are delivered for or on behalf of any account debtor; all
accessions to all of the foregoing described properties and interests in
properties; all guarantees, endorsements and indemnifications on, or of, any of
the foregoing; and all customer lists, invoices, ledgers, books of account,
records, files (whether in printed form or stored electronically), computer
programs, computer disks or tape files, computer print-outs, computer runs and
other computer-prepared information relating to any of the foregoing.
"Bank Claim" shall mean all obligations of the Company to the Working
Capital Facility Agent and the Banks as set forth in the New Working Capital
Facility or in the documents evidencing or securing any Permitted Bank
Refinancing, all sums loaned, advanced to or for the benefit of the borrowers
thereunder at any time, any interest thereon, any future advances, any costs of
collection or enforcement, including, without limitation, reasonable attorneys'
and paralegals' costs and fees, and any prepayment fees with respect thereto.
"Bank Collateral" shall mean the Collateral in which the Working
Capital Facility Agent has a lien or security interest as described in and
provided by subsection 2.1(a).
"Bank Intangibles" shall mean all of the Company's now owned or
hereafter acquired contract rights relating to Bank Collateral, goodwill,
descriptions, name plates, choses-in-action, causes of action, catalogs,
confidential information, consulting agreements, engineering contracts, and such
other assets which relate to the goodwill of the business of the Company and
rights to refunds or indemnification to the extent the foregoing relate to Bank
Collateral, deposit accounts, letters of credit, documents, instruments, chattel
paper, and income tax refunds to the extent relating to Bank Collateral, claims
for tax or other refunds against any city, county, state, or federal government,
or any agency or authority or other subdivision thereof relating to Bank
Collateral, lease agreements relating to Bank Collateral, corporate or other
business records relating to Bank Collateral and all other general intangibles
of every kind and description relating to Bank Collateral; provided, however,
that Bank Intangibles shall in no event include Intellectual Property.
"Bank Primary Collateral" shall mean, collectively, the Accounts,
Inventory and Bank Intangibles.
"Collateral" shall mean all of the Noteholder Collateral and Bank
Collateral.
"Copyrights" shall mean all of the Company's now owned or hereafter
acquired copyrights of the United States or any other country, and all
registrations and recordings thereof, including, without limitation,
applications, registrations and recordings in the United States Copyright Office
or in any similar office or agency of the United States or in any similar office
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or agency of any other country or any political subdivision thereof and all
copyrights in derivative works, extensions or renewals thereof.
"Enforcement" shall mean, collectively or individually, for either of
the Working Capital Facility Agent or the Collateral Agent to make demand for
payment or accelerate the indebtedness of the Company (other than any
acceleration which may occur automatically upon the filing of a bankruptcy
petition by the Company) held by such person, repossess any Collateral or
commence the judicial or other enforcement of any of the rights and remedies of
the Secured Party under the Indentures, the Credit Agreement, the New Working
Capital Facility, the instruments evidencing any Additional Senior Debt any
related mortgages, guarantees or agreements or under applicable law.
"Enforcement Notice" shall mean a written notice delivered, at a time
when an "Event of Default" (as defined in the Indentures, the Credit Agreement
or the New Working Capital Facility, as applicable) or any event of default as
set forth in the documents evidencing or securing Additional Senior Debt or
Permitted Bank Refinancing has occurred and is continuing, by either the
Collateral Agent or the Working Capital Facility Agent to the other Secured
Party announcing that Enforcement has commenced, specifying the relevant Event
of Default (as defined in the Indentures, the Credit Agreement or the New
Working Capital Facility, as applicable) or event of default (as set forth in
the documents evidencing or securing such Additional Senior Debt or Permitted
Bank Refinancing, as applicable), stating the current amount of the Noteholder
Claim or Bank Claim and requesting the current amount of the others' claims.
"Enforcement Period" shall mean the period of time following the giving
by a Secured Party of an Enforcement Notice to the other Secured Party until
either (i) the final payment or satisfaction in full of either the Noteholder
Claim or the Bank Claim, or (ii) the Collateral Agent and the Working Capital
Facility Agent agree in writing to terminate the Enforcement Period.
"Equipment" shall mean all of the Company's now owned or hereafter
acquired machinery, apparatus, equipment, fittings, fixtures, improvements and
articles of personal property of every kind and nature whatsoever attached or
affixed to, or located on, the Real Property or used in connection with the use
and enjoyment of the Real Property or the maintenance or preservation thereof,
including, without limitation, all equipment comprising the Modernization
Project (as defined in each Indenture), all manufacturing, storage, handling and
other equipment utilized in connection with the production and marketing of
steel, semi-finished steel, steel ingots, slabs, steel strips and coils, tools,
utility systems, fire sprinkler and alarm systems, HVAC equipment, boiler,
electronic data processing, telecommunications or computer equipment,
refrigeration, electronic monitoring, water or lighting systems, power,
sanitation, waste removal, pollution abatement or control, elevators, window
cleaning, maintenance or other systems or equipment, all indoor or outdoor
furniture, appliances or supplies, and all other articles used or useful in
connection with the use, operation, maintenance or repair of any part of the
Real Property, together with any and all parts, improvements, additions,
replacements, accessions, and substitutions thereto or therefor, and all
licenses and other rights of the Company relating thereto, whether in the
possession and
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control of the Company, or in the possession and control of a third party for
the account of the Company and all maintenance and warranty records relating
thereto.
"Intellectual Property" shall mean, collectively, all Copyrights,
Patents and Trademarks and all licenses therefor and all licenses under the
patents, trademarks, copyrights and trade secrets of third parties to the
Company.
"Inventory" shall mean all now owned or hereafter acquired inventory of
the Company including, without limitation, all goods, merchandise, raw
materials, work-in-process and finished goods intended for sale or lease, of
every kind and description now or at any time hereafter owned by the Company,
together with all the containers, packing, packaging, shipping and similar
materials related thereto, and including such inventory as is temporarily out of
the Company's custody or possession and items in transit and including any
returns and repossessions upon any accounts, documents, instruments or chattel
paper relating to or arising from the sale of inventory (as such documents,
instruments or chattel paper relate to the sale of such inventory) and
including, without limitation, all other classes of merchandise, materials,
parts, supplies, work-in-process, inventories and finished products intended for
sale by the Company and all substitutions therefor or replacements thereof, and
all additions and accessions thereto, and all invoices, ledgers, books of
account, records, files (whether in printed form or stored electronically),
computer programs, computer disks or tape files, computer printouts, computer
runs and other computer-prepared information relating to any of the foregoing.
"Noteholder Claim" shall mean all obligations of the Company to the
Collateral Agent and the other Senior Note Secured Parties under the Indentures,
the Credit Agreement, the Notes, any instruments evidencing or securing
Additional Senior Debt and any mortgages or other security instruments securing
the Company's obligations in respect of its guarantee of the Notes, including in
each case, without limitation, all principal and interest owing by AMI, any
future advances, any costs of collection or enforcement, and reasonable
attorneys' and paralegals' costs and fees.
"Noteholder Collateral" shall mean the Collateral in which the
Collateral Agent and the Secured Parties have a lien or security interest as
described in and provided by subsection 2.1(b).
"Noteholder Intangibles" shall mean all of the Company's now owned or
hereafter acquired contract rights relating to Noteholder Collateral, goodwill,
descriptions, name plates, choses-in-action, causes of action, catalogs,
confidential information, consulting agreements, engineering contracts, and such
other assets which relate to the goodwill of the business of the Company and
rights to refund or indemnification to the extent the foregoing relate to
Noteholder Collateral, deposit accounts, letters of credit, documents,
instruments, chattel paper, and income tax refunds to the extent relating to
Noteholder Collateral, claims for tax or other refunds against any city, county,
state, or federal government, or any agency or authority or other subdivision
thereof relating to Noteholder Collateral, lease agreements relating to
Noteholder Collateral, corporate or other business records relating to
Noteholder Collateral and all other general intangibles of every kind and
description relating to Noteholder Collateral.
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"Noteholder Primary Collateral" shall mean, collectively, the Real
Property, Equipment, Noteholder Intangibles, Securities and Intellectual
Property.
"Patents" shall mean all of the Company's now owned or hereafter
acquired letters patent of the United States or any other country, and all
patent applications therefor, including, without limitation, patents and patent
applications in the United States Patent and Trademark Office (the "PTO") or in
any similar office or agency of the United States or in any similar office or
agency of any other country or any political subdivision thereof, and all
reissues, re-examinations, continuations, divisionals, continuations-in-part or
extensions thereof and all associated priority rights.
"Permitted Bank Refinancing" means any amendment, supplement,
refinancing or replacement of the New Working Capital Facility as permitted by
the Credit Agreement in accordance with the definition of "Working Capital
Facility" therein that is secured by a lien on the Bank Collateral; provided,
however, that a representative of the lenders thereunder executes a supplement
to this Agreement under which it becomes the "Working Capital Facility Agent"
for all purposes hereunder, and agrees to comply with all the terms hereof.
"Proceeds" shall have the meaning assigned to the term "proceeds" under
the UCC and, in any event, shall include, without limitation, any and all (i)
proceeds of any insurance, indemnity, warranty or guarantee payable to the
Collateral Agent, to the Working Capital Facility Agent or to the Company from
time to time with respect to any of the Collateral, (ii) payments (in any form
whatsoever) made or due and payable to the Company from time to time in
connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Collateral by any governmental authority
(or any person acting under color of a governmental authority), (iii) products
of the Collateral and (iv) other amounts from time to time paid or payable under
or in connection with any of the Collateral.
"Real Property" shall mean the real property described on Schedule I
hereto and mortgaged to the Collateral Agent pursuant to a certain mortgage to
be recorded as soon as practicable following the execution and delivery of this
Agreement and all other real property mortgaged to the Collateral Agent, and all
improvements and fixtures on and interests in such real property, including,
without limitation, such improvements and fixtures on and interests in such real
property as to which security interests are perfected by UCC-1 financing
statements for fixtures.
"Secured Party" shall mean any of the Collateral Agent (for the benefit
of the Senior Note Secured Parties) or the Working Capital Facility Agent (for
the benefit of the Banks).
"Securities" shall mean all present and future securities owned by the
Company, including but not limited to, the capital stock of Alabama
Metallurgical Corporation, a Washington corporation, held by the Collateral
Agent pursuant to a certain stock pledge agreement dated as of the date hereof
and all dividends, cash, options, warrants, rights, instruments, distributions,
returns of capital, income, profits and other property or interests from
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time to time received, receivable or otherwise distributed to the Company in
respect of or in exchange for any or all of the foregoing.
"Trademarks" shall mean all of the Company's now owned or hereafter
acquired trademarks, trade names, trade styles, service marks, designs and
general intangibles of like nature, and all registrations and recordings
thereof, including, without limitation, applications, registrations and
recordings in the PTO or in any similar office or agency of the United States or
any State thereof, or in any similar office or agency of any other country or
any political subdivision thereof, together with the goodwill associated
therewith, and all reissues, amendments, extensions or renewals thereof.
"UCC" shall mean the Uniform Commercial Code as in effect in any
relevant jurisdiction.
II. INTERCREDITOR PROVISIONS
2.1. Liens. Notwithstanding the date, manner or order of perfection of
the security interests and liens granted to the Working Capital Facility Agent
or the Collateral Agent, and notwithstanding any provisions of the UCC, or any
applicable law or decision or the New Working Capital Facility, the Indentures,
the Credit Agreement or any instruments evidencing any Additional Senior Debt,
or whether the Working Capital Facility Agent or the Collateral Agent holds
possession of all or any part of the Collateral, or the granting provisions of
any mortgage or security instrument or the provisions of any financing
statement, the following, as between the Working Capital Facility Agent and the
Collateral Agent, shall be the relative rights with respect to the various
security interests and liens of the Working Capital Facility Agent and the
Collateral Agent in the Collateral:
(a) The Working Capital Facility Agent shall have a first and
prior security interest in or lien on the Bank Primary Collateral and
Proceeds thereof and the Collateral Agent shall have no lien thereon or
security interest therein.
(b) The Collateral Agent shall have a first and prior security
interest in or mortgage lien on the Noteholder Primary Collateral and
Proceeds thereof and the Working Capital Facility Agent shall have no
lien thereon or security interest therein.
2.2. Distribution of Proceeds of Collateral. All Proceeds of Collateral
shall be distributed in accordance with the following procedure:
(a) Proceeds of the Noteholder Collateral shall be applied to
the Noteholder Claim (to be distributed pro rata among the Trustees,
the Working Capital Facility Agent and any Additional Secured Party to
the extent that such Noteholder Collateral secures Additional Senior
Debt of such Additional Secured Party, on the basis of the respective
outstanding principal amounts of the Notes, the Loans (as defined in
the Credit Agreement) and the applicable Additional Senior Debt or as
may be otherwise determined pursuant to the Collateral Agency
Agreement). After the Noteholder Claim is
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paid in full or otherwise satisfied, any remaining proceeds of the
Noteholder Collateral shall be paid over to the Company or as otherwise
required by applicable law.
(b) Proceeds of the Bank Collateral shall be applied to the
Bank Claim. After the Bank Claim is paid in full or otherwise
satisfied, any remaining proceeds of the Bank Collateral shall be paid
over to the Company or as otherwise required by applicable law.
2.3. Enforcement Actions. The Working Capital Facility Agent agrees not
to commence Enforcement with respect to the New Working Capital Facility and/or
any security instrument relating thereto or any instrument evidencing or
securing any Permitted Bank Refinancing until an Enforcement Notice has been
given to and received by the Collateral Agent. The Collateral Agent agrees not
to commence Enforcement with respect to the Indentures, the Notes, the Credit
Agreement and/or any security instrument relating thereto or any instrument
evidencing or securing any Additional Senior Debt until an Enforcement Notice
has been given to and received by the Working Capital Facility Agent. The
Working Capital Facility Agent, on the one hand, and the Collateral Agent, on
the other hand, agree that during an Enforcement Period:
(a) The Working Capital Facility Agent may, at its option,
take any action to accelerate payment of the Bank Claim and to
foreclose or realize upon or enforce any of its rights with respect to
the Bank Collateral, without the prior written consent of the
Collateral Agent.
(b) The Collateral Agent may, at its option, take any action
to accelerate payment of the Noteholder Claim and to foreclose or
realize upon or enforce any of its rights with respect to the
Noteholder Collateral, without the prior written consent of the Working
Capital Facility Agent.
(c) For up to one-hundred and twenty (120) days following the
issuance of an Enforcement Notice, the Working Capital Facility Agent
may (i) enter upon any or all of the Company's premises, whether leased
or owned, without force or process of law and without obligation to pay
rents, royalties or compensation to the Collateral Agent or the Company
(except that the Working Capital Facility Agent shall pay rents payable
to lessors of leased Real Property used or occupied by the Working
Capital Facility Agent); and (ii) use the Equipment, Intellectual
Property, Noteholder Intangibles and the Real Property to the extent
necessary to complete the manufacture of the Inventory, collect the
Accounts and sell or otherwise dispose of the Bank Collateral. In the
event any occurrence beyond the reasonable control of the Working
Capital Facility Agent shall prevent or otherwise prohibit the Working
Capital Facility Agent or its designees from taking any action with
respect to the Bank Collateral as contemplated in this subsection
2.3(c), including, without limitation, any bankruptcy, insolvency or
similar proceeding with respect to the Company or its properties, such
120-day period shall be extended by the number of days that the Working
Capital Facility Agent's or its designees' access to the Bank
Collateral shall have been prevented thereby; provided, however, that
the number of days within such extension period shall in no event
exceed sixty (60) days.
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During such 120-day period and thereafter, as applicable, if the
Working Capital Facility Agent has entered upon the Company's premises
as provided herein, the Working Capital Facility Agent shall use its
best efforts to complete the manufacture of the Inventory and sell or
otherwise dispose of the Bank Collateral, and the Collateral Agent and
their designees shall have unrestricted access to the Noteholder
Collateral for the purpose of evaluating the Noteholder Collateral and
showing it to potential purchasers.
2.4. Additional Credit Extensions. Subject to any restrictions on the
Company contained in the Indentures, the Credit Agreement, the New Working
Capital Facility or the instruments evidencing or securing any Additional Senior
Debt or Permitted Bank Refinancing, any Secured Party shall have the right,
without the consent of the other, to extend credit to the Company in excess of
the maximum amounts set forth in the New Working Capital Facility, the
Indentures, the Credit Agreement or the instruments evidencing or securing any
Additional Senior Debt or Permitted Bank Refinancing, as applicable, and whether
under such agreements or under any other agreements with the Company, secured by
the Bank Collateral or the Noteholder Collateral, as the case may be, and
otherwise having the same rights as herein contained. Notwithstanding the
foregoing, if any such advance(s) are secured by collateral other than the
Collateral, the Secured Party making such advances shall have no obligation to
marshal the assets of the Company before enforcing its rights in the Collateral
hereunder. Each Secured Party shall use its best efforts to give to the others
notice of its intent to extend credit, but the failure to do so shall not affect
the validity of the extension of credit, create a cause of action against the
party failing to give such notice or create any claim or right on behalf of any
third party.
2.5. Notices of Default. The Working Capital Facility Agent, on the one
hand, and the Collateral Agent, on the other hand, agree to use their best
efforts to give to the other copies of any notice of the occurrence or existence
of an Event of Default, an event of default under the Credit Agreement or any
event of default under the instruments evidencing or securing any Additional
Senior Debt or Permitted Bank Refinancing sent to the Company and/or AMI
simultaneously with the sending of such notice to the Company and/or AMI, but
the failure to do so shall not affect the validity of such notice or create a
cause of action against the Secured Party failing to give such notice or create
any claim or right on behalf of any third party. The sending of such notice
shall not give the recipient the obligation to cure such Event of Default or
event of default.
2.6. Working Capital Facility Agent for Perfection; Actions with
Respect to Collateral. The Working Capital Facility Agent and the Collateral
Agent hereby appoint each other as agent for purposes of perfecting their
respective security interests in and liens on Collateral which is of a type such
that perfection of a security interest therein may be accomplished only by
possession thereof by the secured party. To the extent that either the
Collateral Agent, on the one hand, or the Working Capital Facility Agent, on the
other hand, obtains possession of the other's Collateral, the Secured Party
having possession shall notify the other Secured Party of such fact and shall
deliver such Collateral to the Secured Party having the claims in respect
thereof under Section 2.1 upon request of such Secured Party.
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2.7. Insurance. Notwithstanding anything to the contrary herein or in
any agreement referred to herein, the Company shall obtain satisfactory lender's
loss payable endorsements naming the Secured Parties, as their interests may
appear, with respect to policies which insure Collateral, or with such other
designation as the Working Capital Facility Agent, on the one hand, and the
Collateral Agent, on the other hand, may agree. Each of the Working Capital
Facility Agent, on the one hand, and the Collateral Agent, on the other hand,
shall have the sole and exclusive right, as against the other, to adjust
settlement of such insurance policy in the event of any loss to its Collateral
and to exercise the rights provided in any security instrument to waive or amend
insurance requirements or to give consents relating to the application of any
proceeds of insurance, including, without limitation, consents relating to
restoration of Collateral following a casualty. All proceeds of such policy
shall be paid to the Secured Party named in the applicable loss payable
endorsement and having the claim as set forth herein and disbursed in accordance
with the applicable provisions of the relevant governing documents.
2.8. UCC Notices. In the event that any Secured Party shall be required
by the UCC or any other applicable law to give notice to any other Secured Party
of any intended disposition of Collateral, such notice shall be given in
accordance with Section 3.1 hereof and ten (10) days' notice shall be deemed to
be commercially reasonable.
III. MISCELLANEOUS
3.1. Notices. All notices hereunder shall be effective upon receipt,
and shall be in writing and sent by certified mail, return receipt requested,
courier service guaranteeing next day delivery, telegram or telex, to: (a) the
Company or AMI, at the address set forth above, Attention: Corporate Secretary
with a copy to the Treasurer, (b) the Working Capital Facility Agent, at the
address set forth above, Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, or (c) the Collateral
Agent, at the address set forth above, Attention: Corporate Trust Administration
or to such other address or person as any of the parties hereto may designate in
writing to the other parties.
3.2. Contesting Liens or Security Interest. Neither the Working Capital
Facility Agent, on the one hand, nor the Collateral Agent, on the other hand,
shall contest the validity, perfection or enforceability of any lien or security
interest granted to the other or others and each shall cooperate in the defense
of any action contesting the validity, perfection or enforceability of such
liens or security interests brought by the Company or any third party; provided,
however, that such cooperation shall not include the expenditure of amounts
other than de minimis amounts; and provided, further, that the cooperating
Secured Party shall, upon the reasonable request of the other Secured Party,
continue to cooperate in the defense of any such action notwithstanding that
such cooperation shall include the expenditure of amounts in excess of de
minimis amounts so long as the requesting Secured Party advances to the
cooperating Secured Party sufficient amounts, in cash, to cover any and all
costs and expenses reasonably incurred by the cooperating Secured Party in
compliance with such request. Each Secured Party shall also use its best efforts
to notify the other Secured Party of any change in the location of any of the
Collateral or the business operations of the Company or of any change in law
which would make it necessary or advisable for any other Secured Party to file
additional financing statements in another location as against the Company, but
the failure to do so shall not create a cause of action
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against the Secured Party failing to give such notice or create any claim or
right on behalf of any third party.
3.3. No Additional Rights for Company Hereunder. If any Secured Party
shall enforce its rights or remedies in violation of the terms of this
Agreement, the Company agrees that it shall not raise such violation as a
defense to the enforcement by any other Secured Party under the New Working
Capital Facility, the Indentures, the Credit Agreement and/or any instrument
evidencing or securing any Additional Senior Debt or Permitted Bank Refinancing,
nor assert such violation as a counterclaim or basis for setoff or recoupment
against any Secured Party.
3.4. Independent Credit Investigations. None of the Working Capital
Facility Agent, the Collateral Agent, any Additional Secured Party or their
respective directors, officers, agents or employees, shall be responsible to the
other or to any other person, firm or corporation, for the Company's solvency,
financial condition or ability to repay the Bank Claim or the Noteholder Claim,
or for statements of the Company, oral or written, or for the validity,
sufficiency or enforceability of the Bank Claim, the Noteholder Claim, the New
Working Capital Facility, the Indentures, the Credit Agreement, the instruments
evidencing any Additional Senior Debt or any liens or security interests granted
by the Company in connection therewith. Each Secured Party has entered into its
respective financing agreements with the Company based upon its own independent
investigation, and makes no warranty or representation to the other Secured
Party nor does it rely upon any representation of any other Secured Party with
respect to matters identified or referred to in this Section.
3.5. Limitation of Liability. Except as provided in this Agreement,
neither the Working Capital Facility Agent, on the one hand, nor the Collateral
Agent, on the other hand, shall have any liability to the other or others except
for gross negligence or willful misconduct.
3.6. Amendments to Financing Arrangements or to this Agreement. The
Working Capital Facility Agent, on the one hand, and the Collateral Agent, on
the other hand, shall each use their best efforts to notify the other of any
amendment or modification to the New Working Capital Facility or any related
security instrument, the Credit Agreement or any related security instrument or
the Indentures or any related security instrument or the instruments evidencing
or securing any Additional Senior Debt or Permitted Bank Refinancing, but the
failure to do so shall not create a cause of action against the party failing to
give such notice or create any claim or right on behalf of any third party. The
Working Capital Facility Agent, on the one hand, and the Collateral Agent, on
the other hand, shall, upon request of the other or others, provide copies of
all such modifications or amendments and copies of all other documentation
relevant to the Collateral except as prohibited by the Indentures or the Credit
Agreement. All modifications or amendments of this Agreement must be in writing
and duly executed by an authorized officer of each party to be binding and
enforceable.
3.7. Marshaling of Assets. The Working Capital Facility Agent hereby
waives any and all rights to have the Noteholder Collateral, or any part
thereof, marshaled upon any foreclosure of any liens of the Collateral Agent.
The Collateral Agent hereby waives any and all
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rights to have the Bank Collateral, or any part thereof, marshaled upon any
foreclosure of any liens of the Working Capital Facility Agent.
3.8. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the respective successors and assigns of each of the
parties hereto, but does not otherwise create, and shall not be construed as
creating, any rights enforceable by any other person not a party to this
Agreement.
3.9. Information. Upon the request of either the Working Capital
Facility Agent, on the one hand, or the Collateral Agent, on the other hand,
each of the Secured Parties shall use its best efforts to provide the others
with all information relating to the transactions contemplated by the New
Working Capital Facility, the Indentures, the Credit Agreement and any
Additional Senior Debt and with any credit or other information with respect to
any of the Collateral except as prohibited by the Indenture or the Credit
Agreement.
3.10. Permitted Bank Refinancing. The Company shall have the right from
time to time to effect a Permitted Bank Refinancing. The Working Capital
Facility Agent shall cooperate in all reasonable respects upon request made from
time to time by the Company to accomplish and document any Permitted Bank
Refinancing. Such cooperation shall include, without limitation, (i) the
execution and delivery of estoppel letters and counsel opinions in customary
form, as may reasonably be requested by the Company or the counterparty to any
Permitted Bank Refinancing or any title insurer in connection therewith, (ii)
the execution and delivery of supplements or amendments to this Agreement and
the delivery of any related certificates, notices or other instruments
reasonably requested to be executed in connection with such Permitted Bank
Refinancing or refinancing thereof and (iii) attendance at meetings relating to,
and any closing of, a Permitted Bank Refinancing. Notwithstanding the foregoing,
no action requested and no document required to be executed and delivered
hereunder shall adversely affect the Working Capital Facility Agent's
substantive rights hereunder. All reasonable expenses incurred by any Secured
Party in complying with the provisions of this Section shall be reimbursed by
the Company.
3.11. Termination. This Agreement will terminate contemporaneously with
the earlier to occur of (i) the termination of the Collateral Agency Agreement,
when all of the Notes have been repaid in full and all of the obligations of the
Company under the Indentures and the guarantee of the Notes have terminated or
(ii) all of the Company's obligations now or hereafter evidenced by the New
Working Capital Facility or the documents evidencing or securing any Permitted
Bank Refinancing shall have been repaid in full and terminated in accordance
with the terms thereof.
3.12. Further Assurances. Each of the parties hereto shall execute and
file all such further documents and instruments, and perform such other acts, as
may be necessary or advisable to effectuate the purposes of this Agreement.
3.13. Inconsistent Provisions. If any provision of this Agreement shall
be inconsistent with, or contrary to, any provision in the New Working Capital
Facility, the Indentures, the
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Credit Agreement, the Notes, the documents evidencing or securing any Additional
Senior Debt or Permitted Bank Refinancing or any other instrument delivered in
connection with the transactions contemplated thereby, the applicable provision
in this Agreement shall be controlling and shall supersede such inconsistent
provision to the extent necessary to give full effect to all provisions
contained in this Agreement.
3.14. CONSENT TO JURISDICTION. THE PARTIES HERETO HEREBY CONSENT TO THE
EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN NEW YORK
COUNTY, STATE OF NEW YORK AND IRREVOCABLY AGREE THAT, SUBJECT TO THE COLLATERAL
AGENT'S OR THE WORKING CAPITAL FACILITY AGENT'S ELECTION, ALL ACTIONS OR
PROCEEDINGS RELATING TO THIS AGREEMENT SHALL BE LITIGATED IN SUCH COURTS. EACH
PARTY HERETO ACCEPTS FOR AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND
UNCONDITIONALLY, IN ANY SUCH ACTIONS OR PROCEEDINGS THE EXCLUSIVE JURISDICTION
OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS, AND
IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION
WITH THIS AGREEMENT, WITH ANY JUDGMENT SUBJECT TO RIGHTS OF APPEAL IN THE
JURISDICTIONS SET FORTH ABOVE.
3.15. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW.
3.16. Authority. Each of the parties represents and warrants to all
other parties hereto that the execution, delivery and performance by or on
behalf of such party to this Agreement has been duly authorized by all necessary
action, corporate or otherwise, does not violate any provision of law,
governmental regulation, or any agreement or instrument by which such party is
bound, and requires no governmental or other consent that has not been obtained
and is not in full force and effect.
3.17. Counterparts. This Agreement may be executed in any number of
counterparts, each counterpart, when so executed and delivered, shall be deemed
to be an original and all of which counterparts, taken together, shall
constitute one and the same agreement.
3.18. Severability of Provisions. Any provision of this Agreement that
is unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such unenforceability, without invalidating the
remaining provisions hereof or affecting the validity or enforceability of such
provision in any other jurisdiction.
3.19. Headings. The article and section headings used in this Agreement
are for convenience of reference only and shall not affect the construction of
this Agreement.
3.20. Concerning Collateral Agent. Notwithstanding anything to the
contrary set forth herein, no provision of this Agreement shall require the
Collateral Agent to expend or risk its
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own funds or otherwise incur any financial liability in the performance of its
duties hereunder, or in the exercise of any of its powers, if it shall have
reasonable grounds for believing repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it including,
without limitation, liability relating in any way to Environmental Laws or
Hazardous Materials (as such terms are defined in the mortgage relating to the
Real Property).
The undersigned hereby acknowledge and agree to the foregoing terms and
provisions. By executing this Agreement, the undersigned agree to be bound by
the provisions hereof as they relate to the relative rights of the Collateral
Agent, any Additional Secured Party and the Working Capital Facility Agent as
among such parties; provided, however, that nothing in this Agreement shall
amend, modify, change or supersede the respective terms of the Indentures, the
Credit Agreement or the New Working Capital Facility or the documents evidencing
or securing any Additional Senior Debt or Permitted Bank Refinancing (or any
other document to which the undersigned may be parties) as between each party
and the undersigned as a borrower and/or guarantor, and in the event of any
conflict or inconsistency between the terms of this Agreement and the
Indentures, the Credit Agreement or the New Working Capital Facility or the
documents evidencing or securing any Additional Senior Debt or Permitted Bank
Refinancing (or any such other documents as the case may be), the terms of the
Indentures, the Credit Agreement, the New Working Capital Facility or the
documents evidencing or securing any Additional Senior Debt or Permitted Bank
Refinancing, as the case may be, shall govern the relationship between each such
party and the undersigned, as borrower and/or guarantor. The undersigned further
agree that the terms of this Agreement shall not give the undersigned any
substantive rights vis-a-vis the holders of the Notes, the Lenders, any
Additional Secured Party, the Collateral Agent, the Banks or the Working Capital
Facility Agent.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
an instrument under seal as of the date and year first above written.
ACME METALS INCORPORATED
By: _________________________
Name:
Title:
ACME STEEL COMPANY
By: _________________________
Name:
Title:
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▇▇▇▇▇▇ TRUST AND SAVINGS BANK
By: _________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
STATE STREET BANK AND TRUST
COMPANY, as Collateral Agent
By: _________________________
Name:
Title:
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