Exhibit 4.7
COLLATERAL AGENCY AND SECOND LIEN INTERCREDITOR AGREEMENT
This COLLATERAL AGENCY AND SECOND LIEN INTERCREDITOR AGREEMENT (this
"Agreement") is made and entered into as of June 18, 2002, by and among ▇. ▇.
▇▇▇▇▇▇ TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association, in
its capacity as trustee (the "Notes Trustee") for the benefit of the holders of
the Notes (as hereinafter defined) under the Notes Indenture (as hereinafter
defined), ▇. ▇. ▇▇▇▇▇▇ TRUST COMPANY, NATIONAL ASSOCIATION, a national banking
association, in its capacity as trustee under the Bond Indenture (as hereinafter
defined) (the "Bond Trustee"; the Notes Trustee and the Bond Trustee are
hereinafter sometimes collectively referred to as the "Beneficiaries" and
individually as a "Beneficiary") for the benefit of the holders of the Bonds (as
hereinafter defined) under the Bond Indenture, and ▇. ▇. ▇▇▇▇▇▇ TRUST COMPANY,
NATIONAL ASSOCIATION, a national banking association, in its capacity as
Collateral Agent (as hereinafter defined) hereunder. All initially capitalized
terms used herein, unless otherwise specifically defined herein, shall have the
respective meanings assigned thereto in Section 1 hereof.
WHEREAS, pursuant to the Notes Indenture, the Company has issued the
Notes;
WHEREAS, pursuant to the Bond Indenture, the Bond Issuer has issued the
Bonds;
WHEREAS, pursuant to the terms of the Bond Loan Agreement, the Bond
Issuer has loaned the proceeds derived from the sale or exchange of the Bonds to
the Company;
WHEREAS, the Company has executed and delivered each of the Deeds of
Trust for the benefit of the Notes Trustee and the Bond Issuer, to secure the
Secured Debt;
WHEREAS, pursuant to the terms of the Bond Indenture and the Bond
Assignment Agreement, the Bond Issuer has assigned certain of its right, title
and interest in the Bond Loan Agreement, Deeds of Trust and other Bond Documents
to the Bond Trustee;
WHEREAS, the Beneficiaries hereby desire to set forth their agreement
with respect to the enforcement, exercise and administration of their respective
rights, interests, powers and authorities as beneficiaries and/or secured
parties under the respective Deeds of Trust and any other security documents now
or hereafter made, given or granted in favor of each of the Beneficiaries with
respect to all or any portion of the Collateral.
Therefore, in consideration of the foregoing and the mutual covenants
set forth below, the parties hereby agree as follows.
1. Definitions. For purposes of this Agreement:
"Bankruptcy Law" means ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code, and any other
state or federal insolvency, reorganization, moratorium or similar law for the
relief of debtors.
"Bankruptcy Proceeding" means any proceeding commenced under any
Bankruptcy Law.
"Beneficiaries" means the Notes Trustee and the Bond Trustee and their
respective successors under the terms of the Notes Indenture and Bond Indenture,
respectively, regardless of whether or not, in connection with the appointment
of any such successor, the rights of the Notes Trustee or Bond Trustee, as the
case may be, under the Deeds of Trust, or any of them, or this Agreement, have
been formally and specifically assigned to such successor trustee by separate
instrument. For purposes of convenience in this Agreement, references to any
Notes Debt, Secured Debt and/or other debt being held by the Notes Trustee as a
Beneficiary, shall be understood to mean Notes Debt, Secured Debt and/or other
debt being held by the respective holders of the Notes.
"Bond Assignment Agreement" means that certain Assignment and Transfer
of Deeds of Trust and Security Agreement dated as of June 18, 2002, from the
Bond Issuer to the Bond Trustee.
"Bond Debt" means, collectively, the Bond Loan and all other
obligations, liabilities and indebtedness owing by the Company to the Bond
Issuer, the Bond Trustee and/or the holders of the Bonds, including, without
limitation, principal, repurchase price, and interest (including, without
limitation, any interest accruing after the
commencement of a Bankruptcy Proceeding with respect to the Company, whether or
not such interest is allowed as a claim in such Bankruptcy Proceeding), fees and
premiums owing by the Company to the Bond Trustee and/or the holders of the
Bonds (including, without limitation, reasonable attorneys' fees and
disbursements), and all other amounts owing under the Bond Loan Agreement, Deeds
of Trust or any of the other Bond Documents.
"Bond Documents" means, collectively, the Bonds, the Bond Indenture,
the Bond Loan Agreement, the Bond Assignment Agreement, the Deeds of Trust and
all other documents, instruments and agreements now or hereafter evidencing,
governing, securing or otherwise pertaining to the Bond Loan or the Bonds or
otherwise executed and delivered by or on behalf of the Company or any other
party in connection with the Bond Loan or the Bonds or any of the foregoing
documents, together with all amendments, modifications, renewals, substitutions
and replacements of or to any of the foregoing.
"Bond Indenture" means that certain Indenture of Trust dated as of June
18, 2002 between the Bond Issuer and the Bond Trustee, pursuant to which the
Bonds were issued, as in effect on the date hereof and as amended, supplemented,
restated or otherwise modified from time to time.
"Bond Issuer" means the City of Weirton, West Virginia, a municipal
corporation duly organized and existing under the Constitution and laws of the
State of West Virginia.
"Bond Loan" means the loan made or deemed to have been made by the Bond
Issuer to the Company in the aggregate principal amount of $27,348,000 pursuant
to the terms of and as evidence by the Bond Loan Agreement.
"Bond Loan Agreement" means that certain Agreement dated as of June 18,
2002 between Company and the Bond Issuer, as assigned to the Bond Trustee
pursuant to the terms of the Bond Indenture, and as amended, supplemented,
restated or otherwise modified from time to time.
"Bond Trustee" means ▇.▇. ▇▇▇▇▇▇ Trust Company, National Association, a
national banking association, in its capacity as trustee under the Bond
Indenture, until a successor trustee shall have become such pursuant to the
applicable provisions of the Bond Indenture, and thereafter "Bond Trustee" shall
mean such successor.
"Bonds" means those certain Secured Pollution Control Revenue Refunding
Bonds (Weirton Steel Corporation Project) Series 2002 issued by the Bond Issuer
pursuant to the Bond Indenture.
"Collateral" means, collectively, (i) the Tandem Mill Collateral, (ii)
the Tin Mill Collateral, (iii) the Hot Mill Collateral, (iv) all other real or
personal property hereafter pledged to or mortgaged or conveyed by deed of
trust, mortgage, deed to secure debt, security agreement or otherwise to each of
the Beneficiaries to secure all or any portion of both the Bond Debt and the
Notes Debt, (v) all proceeds of any of the foregoing, and (vi) all other assets
of the Company or any Subsidiary or affiliate thereof on which each of the
Beneficiaries are granted a Lien to secure all or any portion of both the Bond
Debt and the Notes Debt. Notwithstanding the foregoing, the Collateral shall not
include any assets or properties consisting of the "Project" as defined in the
Bond Loan Agreement.
"Collateral Agent" has the meaning assigned thereto in Section 2.1
hereof.
"Company" means Weirton Steel Corporation, a Delaware corporation,
together with its such successors and assigns as are permitted under the terms
of the Notes Indenture and Bond Loan Agreement.
"Controlling Party" has the meaning assigned thereto in Section 4
hereof.
"Credit Documents" means collectively, the Bond Documents and the Notes
Documents.
"Deeds of Trust" means, collectively, (i) the Hot Mill Deed of Trust,
(ii) the Tandem Mill Deed of Trust, (iii) the Tin Mill Deed of Trust, (iv) the
Security Agreement and (v) any other deed of trust, mortgage, deed to secure
debt, security agreement or other instrument encumbering any Collateral which is
given or made by the Company
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or any Subsidiary thereof to or for the benefit of each of the Beneficiaries to
secure all or any portion of both the Bond Debt and the Notes Debt.
"Excluded Indebtedness" means any Bonds or Notes which are owned by or
held for the account of the Company, the Bond Issuer or any other obligor on the
Bonds or Notes, or any Subsidiary or affiliate thereof, unless all Bonds and all
Notes are owned by or held for the account of one or more such Persons.
"Hot Mill Collateral" means the real property constituting the
Company's Hot Strip Mill located at Company's Weirton, West Virginia
steel-making facility, which converts slabs into flat rolled coils, together
with all equipment and fixtures now or hereafter located thereon (whether or not
later moved), as described with particularity in the Hot Mill Deed of Trust,
together with all other property, real or personal, conveyed by or pledged under
or pursuant to the Hot Mill Deed of Trust and/or the Security Agreement and
otherwise described as "Property" or "Collateral", respectively, therein;
provided, however, that only that portion of the "Collateral" described in the
Security Agreement which is located on, is used in connection with or is
proceeds of the Hot Strip Mill shall be included as part of the "Hot Mill
Collateral."
"Hot Mill Deed of Trust" means that certain Deed of Trust dated as of
June 18, 2002, made by the Company in favor of ▇▇▇▇▇ ▇▇▇▇, as trustee, for the
benefit of the Notes Trustee and Bond Issuer, as beneficiaries, and encumbering
the portion of the Hot Mill Collateral which constitutes real property, as the
Bond Issuer's rights thereunder have been assigned to the Bond Trustee pursuant
to the Bond Indenture and Bond Assignment Agreement, and as amended,
supplemented, restated or otherwise modified from time to time.
"Lien" means, with respect to any property, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such
property.
"Master Intercreditor Agreement" means that certain Intercreditor
Agreement, dated as of June 18, 2002, by and among each Beneficiary, the
Collateral Agent on behalf of the Beneficiaries, and Fleet Capital Corporation,
as agent for certain lenders to the Company, as amended, modified, supplemented
or restated from time to time.
"Minority Party" has the meaning assigned thereto in Section 4 hereof.
"Notes" means those certain 10% Senior Secured Notes due 2008, issued
by Company pursuant to the Notes Indenture.
"Notes Debt" means, collectively, the indebtedness evidenced by the
Notes and all other obligations, liabilities and indebtedness owing by the
Company to the Notes Trustee and/or the holders of the Notes, including, without
limitation, principal and interest (including, without limitation, any interest
accruing after the commencement of a Bankruptcy Proceeding with respect to the
Company, whether or not such interest is allowed as a claim in such Bankruptcy
Proceeding), fees and premiums owing by the Company to the Notes Trustee and/or
the holders of the Notes (including, without limitation, reasonable attorneys'
fees and disbursements), and all other amounts owing under the Notes Indenture,
Deeds of Trust or any of the other Notes Documents.
"Notes Documents" means, collectively, the Notes, the Notes Indenture,
the Deeds of Trust and all other documents, instruments and agreements now or
hereafter evidencing, governing, securing or otherwise pertaining to the Notes
or otherwise executed and delivered by or on behalf of the Company or any other
party in connection with the Notes or any of the foregoing documents, together
with all amendments, modifications, renewals, substitutions and replacements of
or to any of the foregoing.
"Notes Indenture" means that certain Indenture dated as of June 18,
2002 between the Company and the Notes Trustee, pursuant to which the Notes have
been issued, as in effect on the date hereof, and as amended, supplemented,
restated or otherwise modified from time to time.
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"Notes Trustee" means ▇.▇. ▇▇▇▇▇▇ Trust Company, National Association,
a national banking association, in its capacity as trustee under the Notes
Indenture, until a successor trustee shall have become such pursuant to the
applicable provisions of the Notes Indenture, and thereafter "Notes Trustee"
shall mean such successor.
"Person" means any individual, corporation, limited or general
partnership, joint venture, association, joint stock company, trust, trustee,
estate, limited liability company, unincorporated organization, real estate
investment trust, or government or any agency or political subdivision thereof
or any other form of entity.
"Proceeds" has the meaning assigned thereto in Section 6 hereof.
"Security Agreement" means that certain Security Agreement, dated as of
June 18, 2002, made by the Company for the benefit of the Bond Issuer and the
Notes Trustee and encumbering a portion of the Hot Mill Collateral, Tandem Mill
Collateral and Tin Mill Collateral which constitutes personal property, as the
Bond Issuer's rights thereunder have been assigned to the Bond Trustee pursuant
to the Bond Indenture and Bond Assignment Agreement, and as amended,
supplemented, restated or otherwise modified from time to time.
"Secured Debt" means, collectively, the Bond Debt and the Notes Debt.
"Subsidiary" means any entity of which another entity owns, directly or
indirectly through one or more intermediaries, more than 50% of the voting
interests at the time of determination.
"Tandem Mill Collateral" means the real property constituting Company's
No. 9 Tandem Mill located at Company's Weirton, West Virginia steel-making
facility, together with all equipment and fixtures now or hereafter located
thereon (whether or not later moved), as described with more particularity in
the Tandem Mill Deed of Trust, together with all other property, real or
personal, conveyed by or pledged under or pursuant to the Tandem Mill Deed of
Trust and/or the Security Agreement and otherwise described as "Property" or
"Collateral", respectively, therein; provided, however, that only that portion
of the "Collateral" described in the Security Agreement which is located on, is
used in connection with or is proceeds of the No. 9 Tandem Mill shall be
included as part of the "Tandem Mill Collateral".
"Tandem Mill Deed of Trust" means that certain Deed of Trust, dated as
of June 18, 2002, made by the Company in favor of ▇▇▇▇▇ ▇▇▇▇, as trustee, for
the benefit of the Notes Trustee and Bond Issuer, as beneficiaries, and
encumbering the portion of the Tandem Mill Collateral which constitutes real
property, as the Bond Issuer's rights thereunder have been assigned to the Bond
Trustee pursuant to the Bond Indenture and Bond Assignment Agreement, and as
amended, supplemented, restated or otherwise modified from time to time.
"Tin Mill Collateral" means the real property constituting Company's
Tin Mill located at Company's Weirton, West Virginia steel-making facility,
together with all equipment and fixtures now or hereafter located thereon
(whether or not later moved), as described with more particularity in the Tin
Mill Deed of Trust (excluding the assets set forth in Exhibit B to the Tin Mill
Deed of Trust), together with all other property, real or personal, conveyed by
or pledged under or pursuant to the Tin Mill Deed of Trust and/or the Security
Agreement and otherwise described as "Property" or "Collateral", respectively,
therein; provided, however, that only that portion of the "Collateral" described
in the Security Agreement which is located on, is used in connection with or is
proceeds of the Tin Mill shall be included as part of the "Tin Mill Collateral".
"Tin Mill Deed of Trust" means that certain Deed of Trust
dated as of June 18, 2002, made by the Company in favor of ▇▇▇▇▇ ▇▇▇▇, as
trustee, for the benefit of the Notes Trustee and Bond Issuer, as beneficiaries,
and encumbering the portion of the Tin Mill Collateral which constitutes real
property, as the Bond Issuer's rights thereunder have been assigned to the Bond
Trustee pursuant to the Bond Indenture and Bond Assignment Agreement, and as
amended, supplemented, restated or otherwise modified from time to time
2. Appointment of Collateral Agent
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2.1 Appointment, Powers and Immunities
(a) The Notes Trustee (for itself and on behalf of the holders
of the Notes) and the Bond Trustee (for itself and on behalf of the holders of
the Bonds) hereby irrevocably (i) designate, appoint and authorize ▇.▇. ▇▇▇▇▇▇
Trust Company, National Association, a national banking association (together
with any successor Collateral Agent appointed pursuant to Section 2.6 hereof,
the "Collateral Agent") to act as Collateral Agent hereunder with such powers as
are specifically delegated to Collateral Agent by the terms of this Agreement,
together with such other powers as are reasonably incidental thereto, and (ii)
authorize and direct the Collateral Agent to execute, deliver and perform the
Master Intercreditor Agreement, in its capacity as Collateral Agent hereunder
and thereunder on behalf of the Notes Trustee and Bond Trustee.
(b) The Collateral Agent hereby accepts its appointment as the
Collateral Agent hereunder upon the terms and conditions of this Agreement, and
hereby agrees to act as representative and bailee with respect to any Proceeds
delivered to the Collateral Agent pursuant to this Agreement for the benefit of
the Beneficiaries upon and subject to the terms and conditions of this
Agreement.
(c) Collateral Agent (i) shall have no duties or
responsibilities except those expressly set forth in this Agreement and, subject
to Section 2.5 hereof, the Master Intercreditor Agreement; (ii) shall not be
responsible to the Beneficiaries for any recitals, statements, representations
or warranties contained in this Agreement or in the Master Intercreditor
Agreement, or in any certificate or other document referred to or provided for
in, or received by any of them in connection with this Agreement or the Master
Intercreditor Agreement, or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or the Master Intercreditor
Agreement or any other document referred to or provided for herein or therein or
for any failure by the Company or any other Person (other than the Collateral
Agent) to perform any of its obligations hereunder or thereunder; and (iii)
except as expressly provided herein, shall not be responsible to the
Beneficiaries for any action taken or omitted to be taken by it hereunder or
under the Master Intercreditor Agreement or under any other document or
instrument referred to or provided for herein or therein or in connection
herewith or therewith, except for its own gross negligence or willful misconduct
as determined by a final non-appealable order of a court of competent
jurisdiction. Collateral Agent may employ agents and attorneys-in-fact and shall
not be responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it in good faith.
2.2 Reliance by Collateral Agent. Collateral Agent shall be entitled to
rely upon any certification, notice or other communication (including any
thereof by telephone, telecopy, telex, telegram, cable or email) believed by it
to be genuine and correct and to have been signed or sent by or on behalf of the
proper Person or Persons, without inquiry or investigation and upon advice and
statements of legal counsel, independent accountants and other experts selected
by Collateral Agent in good faith. As to any matters not expressly provided for
by this Agreement, Collateral Agent shall in all cases be fully protected in
acting, or in refraining from acting, hereunder in accordance with instructions
given by the Controlling Party to the extent such instructions are otherwise
consistent and in compliance with the terms hereof. Any action taken or failure
to act pursuant to the instructions of the Controlling Party shall be binding on
the Bond Trustee and the Notes Trustee provided that such instructions are
otherwise consistent and in compliance with the terms hereof. Collateral Agent
shall have no obligation to take or not to take any action pursuant to any
instructions of (a) any holder of Notes or any group of holders of Notes
(regardless of the percentage of the outstanding Notes Debt held by such holder
or holders of Notes), except for instructions in writing received by Collateral
Agent from the Notes Trustee, or (b) any holder of Bonds or any group of holders
of Bonds (regardless of the percentage of the outstanding Bonds held by such
holder or holders of Bonds), except for instructions in writing received by
Collateral Agent from the Bond Trustee, except, in either case, to the extent
that such holders have the legal right to direct such action or prevent any
action under the terms of the applicable Credit Documents.
2.3 Non-Reliance on Collateral Agent and Other Lenders. Collateral
Agent has no responsibility to make and has made no representation and has not
furnished documents or information to support any credit analysis by Notes
Trustee or Bond Trustee, and neither Notes Trustee nor Bond Trustee may claim
reliance on Collateral Agent. Collateral Agent shall not be required to keep
itself informed as to the performance or observance by any Person of any term or
provision of any Credit Document or any other document referred to or provided
for herein or therein or to inspect the properties or books of the Company.
Collateral Agent shall not have any duty or responsibility to provide Notes
Trustee or Bond Trustee with any credit or other information concerning the
affairs, financial condition or business of the Company that may come into the
possession of Collateral Agent.
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2.4 Failure to Act. Collateral Agent shall in all cases be fully
justified in failing or refusing to act hereunder and under the Master
Intercreditor Agreement unless it shall receive further assurances to its
satisfaction from the Beneficiaries that Collateral Agent shall have no
liability to the Beneficiaries as a result of any such action.
2.5 Master Intercreditor Agreement.
(a) Each Beneficiary hereby authorizes, instructs and directs
the Collateral Agent on behalf of such Beneficiary and without the requirement
of further instruction from such Beneficiary to (i) execute and deliver any
subordination agreement, intercreditor agreement or any other similar agreement
pursuant to the provisions of Section 10(h) of the Master Intercreditor
Agreement or on behalf of, or which agreement is otherwise binding upon, the
Beneficiaries or either of them (each, an "Additional Intercreditor Agreement"),
or (ii) execute and deliver or otherwise cause to occur, by consent,
acquiescence or otherwise, a release of any portion of the Collateral or a
subordination of either Beneficiary's interest in the Collateral, in each case,
to the extent required under the Master Intercreditor Agreement. Notwithstanding
anything to the contrary contained in this Agreement or in the Master
Intercreditor Agreement, the Collateral Agent shall not, without the prior
written consent and direction of each of the Beneficiaries, enter into, execute,
deliver or otherwise agree to any amendment, modification or supplement to or
any restatement or confirmation of or any waiver of any term or provision set
forth in, the Master Intercreditor Agreement or any Additional Intercreditor
Agreement or of any of the rights of the Collateral Agent, on behalf of the
Beneficiaries, thereunder. The Beneficiaries shall indemnify and hold the
Collateral Agent harmless from any liability or expense incurred by the
Collateral Agent in connection with any action taken or omitted to be taken by
the Collateral Agent under the Master Intercreditor Agreement upon and in
compliance with the written consent and direction of each of the Beneficiaries.
(b) In the event that either the Notes Debt or the Bond Debt
which is secured by the Collateral has been fully repaid and the applicable
Beneficiary's interest in the Collateral has been released by such Beneficiary
and thus, this Agreement is to be terminated in accordance with its terms, the
Collateral Agent shall assign all of its right, title and interest in, to and
under, and all of its obligations under, the Master Intercreditor Agreement to
the Beneficiary which continues to have an interest in the Collateral, or any
portion thereof. This Section 2.5(b) shall survive the termination of this
Agreement.
2.6 Removal; Resignation.
(a) The Collateral Agent may be removed at any time by the
Controlling Party by an instrument in writing delivered to the Collateral Agent
and the Minority Party. Collateral Agent may resign at any time by giving thirty
(30) days prior written notice thereof to each of the Beneficiaries. In the
event of any such removal or resignation, the Controlling Party shall have the
right to appoint a successor Collateral Agent reasonably acceptable to the
Minority Party. The removal or resignation of the Collateral Agent shall not
take effect until the appointment of a successor Collateral Agent.
(b) Upon the acceptance of any appointment as Collateral Agent
hereunder by a successor Collateral Agent and the delivery of any Collateral or
Proceeds that may be in the possession of the former Collateral Agent, (i) the
successor Collateral Agent shall succeed to and become vested with all the
rights, powers, privileges and duties of the former Collateral Agent, and shall
execute and deliver such instrument acknowledging same, as may be reasonably
requested by the agent for the lenders to the Company pursuant to the Master
Intercreditor Agreement, (ii) the former Collateral Agent shall have no further
duties and obligations hereunder and (iii) the former Collateral Agent shall, at
the expense of the Beneficiaries and upon the written request of the successor
Collateral Agent and without representation, warranty or recourse, execute and
deliver such documents, instruments and agreements as are reasonably necessary
to effect an assignment of the rights and obligations of the former Collateral
Agent to the successor Collateral Agent including, without limitation, an
assignment of its rights and obligations under the Master Intercreditor
Agreement. After any former Collateral Agent's resignation or removal hereunder
as Collateral Agent, the provisions of this Section 2 shall continue in effect
for its benefit in respect of any actions taken or omitted to be taken by it
while it was acting as Collateral Agent.
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3. Pari Passu Priority; Lien Priority.
(a) The Notes Trustee hereby agrees that each Lien of the
Notes Trustee for the benefit of the holders of the Notes in the property and
assets constituting the Collateral pursuant to the Notes Documents, to the
extent of the obligations secured by such Lien (provided that the aggregate
principal amount of the indebtedness secured by such Liens shall not exceed
$118,242,300) shall be equal in priority with each Lien of the Bond Trustee for
the benefit of the holders of the Bonds in the property and assets constituting
the Collateral pursuant to the Bond Documents, to the extent of the obligations
secured by such Lien (provided that the aggregate principal amount of the
indebtedness secured by such Lien shall not exceed $27,348,000).
(b) The Bond Trustee hereby agrees that each Lien held by the
Bond Trustee for the benefit of the holders of the Bonds in the property and
assets constituting the Collateral pursuant to the Bond Documents, to the extent
of the obligations secured by such Lien (provided that the aggregate principal
amount of the indebtedness secured by such Lien shall not exceed $27,348,000)
shall be equal in priority with each Lien of the Notes Trustee on behalf of the
holders of the Notes in the property and assets constituting the Collateral
pursuant to the Notes Documents, to the extent of the obligations secured by
such Lien (provided that the aggregate principal amount of indebtedness secured
by such Liens shall not exceed $118,242,300).
(c) The priorities of the Liens established, altered or
specified herein are applicable irrespective of:
(i) the time or order of attachment or perfection
thereof;
(ii) the method of perfection;
(iii) the time or order of filing or recording of
financing statements, mortgages, deeds of trust, or any other instruments; or
(iv) any amendments to the Liens established, altered
or specified herein, provided that such amendment does not alter the aggregate
principal amount of the indebtedness secured by such Lien; and
(v) the time or order of foreclosure, taking of
possession or the exercise of any remedy.
provided, however, that the priorities of any Liens which are not established,
altered or specified herein shall be unaffected and shall exist and continue in
accordance with applicable law. The agreements in this Section 3(c) are solely
for the purpose of establishing the relative priorities of the interests of the
Beneficiaries in the Collateral and shall not inure to the benefit of any other
Person.
4. Controlling Party. The Beneficiary or Beneficiaries holding a
majority in principal amount of indebtedness secured by the Collateral
(excluding, however, the principal amount of any Excluded Indebtedness) (the
"Controlling Party") shall have the sole right, without the affirmative consent
of, but with written notice to, any other Beneficiary or Beneficiaries (the
"Minority Party"), and on behalf of itself and each Beneficiary to (a) take any
action, or fail to take any action, to enforce or exercise (or decline to
exercise) any right or remedy with respect to the Collateral and to foreclose
upon, collect and dispose of the Collateral or any portion thereof in accordance
with one or more of the applicable Deeds of Trust and (b) exercise any right or
remedy, or decline to exercise any right or remedy, with respect to the
Collateral in accordance with one or more of the applicable Deeds of Trust in
any Bankruptcy Proceeding, including, without limitation, any right of election
under Sections 1111(b) or 365(h) of the Bankruptcy Code, any other rights of
election, determinations, proofs of claims or other rights or remedies in
connection with any Bankruptcy Proceeding; provided that each Minority Party
shall have the right to file its own proof(s) of claim in any Bankruptcy
Proceeding.
5. Rights of Minority Party. In accordance with Section 4 hereof, the
Minority Party agrees (regardless of whether any Beneficiary agrees, disagrees
or abstains with respect to any action or failure to act by the Controlling
Party) that the Controlling Party shall have the authority to act or fail to
act, as it deems necessary in its sole
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discretion, with respect to the rights and remedies of all of the Beneficiaries
with respect to the Collateral and that the Controlling Party shall have no
liability for acting or failing to act (provided such action or failure to act
does not conflict with the express terms of this Agreement). Each Beneficiary
further acknowledges and agrees that the only right of such Beneficiary with
respect to the Collateral is to be secured by the Collateral as and to the
extent provided in its respective Credit Documents and as provided herein and to
receive a share of the Proceeds (as hereinafter defined) of the Collateral, if
any, to the extent provided under Section 6 hereof; provided, however, that, in
no event shall any rights or benefits accorded any Beneficiary include any right
to challenge, contest or dispute any action taken or not taken, with respect to
the Collateral by the Controlling Party, the Collateral Agent or the other
Beneficiary in accordance with this Agreement, and in no event shall any
security interest granted to any Beneficiary entitle such Beneficiary to enforce
its respective rights in respect of the Collateral except through the
Controlling Party and the Collateral Agent in accordance with this Agreement;
provided, further, that notwithstanding the foregoing, no provision of this
Agreement shall be construed to relieve the Controlling Party from liability for
its own grossly negligent action, its own grossly negligent failure to act, its
own willful misconduct or any action taken by it in bad faith. In addition, the
Minority Party agrees that it (a) will release all Liens in all or any portion
of the Collateral (to the extent of its respective interest therein) in the
event that the Controlling Party elects to sell all or any portion of the
Collateral in exercising any right or remedy with respect to the Collateral; and
(b) waives any right of election, determination, proof of claim (except as set
forth in the last proviso set forth in Section 4 hereof) or other rights or
remedies in connection with any Bankruptcy Proceeding with respect to the
Collateral. Each of the Beneficiary's hereby agrees that it (i) shall not
contest or challenge the validity, perfection or priority of the other
Beneficiaries' Liens with respect to the Collateral; and (ii) waives any right
of claim of equitable subordination which it may have in connection with the
bankruptcy of any Person.
6. Collection and Distribution of Proceeds. The Beneficiaries each
agree that all money, funds or property collected or acquired with respect to
the Collateral (including, without limitation, any net condemnation proceeds or
other awards, insurance or other loss recoveries which are required or permitted
under each of the Credit Documents to be applied to the indebtedness secured
thereby and any property (real and personal) and any amounts in respect of any
deficiency recoveries) (collectively, "Proceeds") in connection with the
enforcement or exercise of any right or remedy with respect to the Collateral
following the acceleration of the Secured Debt of the Company by either of the
Beneficiaries or in connection with a sale, exchange, refinancing or other
disposition of any portion of the Collateral which is permitted under the Bond
Documents, the Note Documents or the Master Intercreditor Agreement and complies
with the terms thereof and is not otherwise held in a Pledged Account (as such
term is defined in the Master Intercreditor Agreement and/or the Security
Agreement and upon the terms and conditions of the Master Intercreditor
Agreement or the Bond Documents or Note Documents), shall be directed to the
Collateral Agent, which Collateral Agent shall be instructed by the Controlling
Party to distribute such Proceeds in the following order of priority: First: to
the payment to the Collateral Agent in respect of all reasonable expenses in
connection with the collection or realization of such Proceeds or the
administration of this Agreement in connection with the collection or
realization of such Proceeds; Second: to the payment to each Beneficiary in
respect of all reasonable expenses in connection with the collection or
realization of such Proceeds or the administration of this Agreement in
connection with the collection or realization of such Proceeds; Third: to each
Beneficiary, a proportion of such remaining Proceeds in the same proportion as
the total principal amount of the outstanding Secured Debt secured by a Lien on
the Collateral held by such Beneficiary bears to the total amount of principal
amount of the outstanding Secured Debt secured by Liens on the Collateral held
by all Beneficiaries until all such Secured Debt of such Beneficiary has been
paid in full disregarding any reduction of any such Secured Debt arising or
occurring because of a foreclosure (or the exercise of any other right or remedy
with respect to the Collateral); Fourth: after full payment of all Secured Debt,
to the Company, except as a court of competent jurisdiction may otherwise
direct. The foregoing distribution of Proceeds shall be subject to the terms and
provisions of the Master Intercreditor Agreement to the extent then in effect.
7. Directions to Collateral Agent. The Collateral Agent may at any time
request directions from the Controlling Party with respect to any Credit
Document of any Beneficiary as to any course of action or other matter relating
hereto or to such Credit Document of any Beneficiary. Except as otherwise
provided in Section 2.5 hereof, directions given by the Controlling Party or
Collateral Agent hereunder shall be binding on all Beneficiaries for all
purposes (provided such directions do not conflict with the express terms of
this Agreement).
- 8 -
8. Enforcement of Rights by Beneficiaries. Each Beneficiary agrees not
to take any action whatsoever to enforce any of its rights in respect of the
Collateral except through the Controlling Party in accordance with Sections 4, 5
and 6 hereof unless reasonably requested to do so by the Controlling Party in
connection with the Controlling Party's exercise or enforcement of the
Beneficiaries' rights and/or remedies under the Deeds of Trust and then only to
the extent so requested; provided, however, that this Agreement shall not
prevent any Beneficiary from enforcing or exercising any right or remedy, to the
extent that such enforcement or exercise of rights or remedies does not impair
the security interest or the rights and/or remedies of the Controlling Party or
any other Beneficiary in the Collateral or otherwise, (i) with respect to
Collateral granted to it alone and not to all other Beneficiaries by its
respective Credit Documents, (ii) with respect to any collateral given or made
to or in favor of such Beneficiary which is not otherwise Collateral or (iii)
with respect to any of the payment and/or performance obligations owing to it
under its respective Credit Documents; nor shall this Agreement grant any of the
Beneficiaries any right or remedy pursuant to the Credit Documents of the other
Beneficiaries. Each Beneficiary waives any requirement for marshaling of assets
by the other Beneficiaries in connection with any foreclosure or realization of
Liens on any collateral other than the Collateral (including the proceeds
thereof) and any other principle of election of remedies.
9. Payment of Secured Debt. In the event that any payment in respect
of, or distribution of the Collateral required to be directed to the Collateral
Agent pursuant to Section 6 hereof, of any kind or character, whether in cash,
property or securities, shall be received by any Beneficiary before all Secured
Debt secured by the Collateral is paid in full, such payment or distribution
shall be held in trust for the benefit of, and shall be paid over to, the
Beneficiaries in accordance with Section 6 hereof.
10. Communications. Each of the Beneficiaries agrees to transmit to all
other Beneficiaries a copy of any communication sent by such Beneficiary to the
Company or any other Person (contemporaneously with the transmittal of any such
communication) with respect to any event of default, any acceleration of
indebtedness, or any notice of sale of any Collateral as a result of a default.
Any failure by any Beneficiary to furnish a notice pursuant to this Section 10
shall in no way diminish the rights of such party hereunder.
11. Governing Law; Transfer or Assignment of Rights. This Agreement
shall be governed by and construed in accordance with the laws of the State of
New York, without regard to the principles of conflicts of law, and shall be
binding upon and inure to the benefit of the Beneficiaries and their respective
successors, designees and assigns. Any transferee or assignee (as may be
permitted under the respective Notes Indenture or Bond Indenture) of either the
Notes Trustee or the Bond Trustee shall, as a condition to such transfer or
assignment, deliver to all parties hereto a written agreement by which such
transferee or assignee agrees to be bound by the obligations imposed by this
Agreement upon the Notes Trustee or the Bond Trustee, as applicable, to the same
extent as if such transferee or assignee was either the Notes Trustee or the
Bond Trustee hereunder. Such transferee or assignee, along with either the Notes
Trustee or the Bond Trustee, as applicable, shall execute all other documents
and instruments reasonably necessary to evidence or carry out the provisions of
the preceding sentence.
12. No Third Party Beneficiaries. This Agreement is solely for the
purpose of establishing the relative interests of the Notes Trustee, the holders
of the Notes, the Bond Issuer, the Bond Trustee and the holders of the Bonds,
and is not for the benefit of any other party other than the Collateral Agent.
No Person shall have the right to enforce any of the provisions hereof other
than the Notes Trustee, on behalf of the holders of the Notes, the Bond Trustee,
on behalf of the holders of the Bonds and the Bond Issuer, and the Collateral
Agent; provided, however, the Company shall have the right to enforce the
provisions of Section 6 to the extent those provisions involve the interests of
the Company.
13. Notices. All notices, consents, approvals or other communications
required under the terms and provisions of this Agreement shall be in writing
and sent to the following addresses:
If to Notes Trustee: ▇.▇. ▇▇▇▇▇▇ Trust Company,
National Association
One Oxford Centre
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Institutional Trust Services
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇ or (▇▇▇) ▇▇▇-▇▇▇▇
- 9 -
If to Bond Trustee: ▇.▇. ▇▇▇▇▇▇ Trust Company,
National Association
One Oxford Centre
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Institutional Trust Services
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇ or
(▇▇▇) ▇▇▇-▇▇▇▇
If to Collateral Agent: ▇.▇. ▇▇▇▇▇▇ Trust Company,
National Association
One Oxford Centre
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Institutional Trust Services
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇ or
(▇▇▇) ▇▇▇-▇▇▇▇
With copies to: Weirton Steel Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇,
Senior Vice President,
Finance and Administration
Facsimile #: (▇▇▇) ▇▇▇-▇▇▇▇
Notices shall be deemed to have been duly given (a) if delivered personally or
otherwise actually received, (b) if sent by overnight delivery service, (c) if
mailed by first class United States mail, postage prepaid, registered or
certified, with return receipt requested, or (d) if sent by facsimile. Notice
mailed as provided in clause (c) above shall be effective on the earlier of the
date of actual receipt or three (3) business days after its deposit. Notice
given in any other manner described in this paragraph shall be effective upon
receipt by the addressee thereof; provided, however, that if any notice is
tendered to an addressee and delivery thereof is refused by such addressee, such
notice shall be effective upon such tender.
14. Repayment of Secured Debt. Simultaneously with the repayment or
other discharge of the Notes Debt or the Bond Debt, as the case may be, which is
secured by the Collateral, the Beneficiary whose Secured Debt is so repaid or
discharged shall execute and deliver all instruments as may be reasonably
required by the other Beneficiary to release or relinquish such Beneficiary's
interest in the Collateral.
15. Exculpation. No Beneficiary shall be liable to any other
Beneficiary for any action taken by it, including the payment of any monies
hereunder, in connection with this Agreement, provided the same is taken in good
faith and did not constitute gross negligence or willful misconduct.
16. Credit Documents. Each Beneficiary shall have the right to alter or
amend its respective Credit Documents and to release or take additional
collateral pursuant thereto. Nothing in this Agreement is intended to alter or
amend the obligations of any Beneficiary with respect to the Company or any of
its Subsidiaries under their respective Credit Documents. Nothing herein is
intended to convey upon the Company or any of its Subsidiaries any right or
benefit with respect to any Beneficiary, and the Company hereby acknowledges,
for itself and its Subsidiaries, that they have no right to enforce the terms
hereunder against any Beneficiary. The Company's signature hereto is merely to
acknowledge this Agreement, which is for the sole benefit of the Beneficiaries.
17. No Recording; Counterparts. This Agreement may not be recorded.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original but all of which together shall constitute one and
the same instrument.
18. Conflicts. To the extent that the Master Intercreditor Agreement
remains in effect and there is a conflict or inconsistency between any provision
hereof and thereof, the provisions of the Master Intercreditor Agreement
- 10 -
shall control and prevail in all respects. To the extent there is a conflict or
inconsistency between any provision hereof regarding the rights as to the
Collateral, on the one hand, and any provision of the Credit Documents, on the
other hand, this Agreement shall control and prevail as among the Beneficiaries
and the Credit Documents shall control and prevail as to the Company.
19. Severability. In case any one or more of the provisions contained
in this Agreement shall be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
20. Modifications. Neither this Agreement nor any provision hereof may
be modified or terminated orally, but only by an instrument in writing, signed
by the party against whom enforcement of the modification or termination is
sought.
21. Termination of Agreement. Upon the full repayment of the Bond Debt
or the Notes Debt, as the case may be, which is secured by the Collateral, this
Agreement shall terminate in all respects except that the party which has been
so repaid shall execute and deliver releases and other instruments in form and
substance as shall be sufficient to terminate such party's interest in the
Collateral.
22. Representations Concerning Company: Liability of Beneficiaries.
None of the Beneficiaries, nor any of their respective directors, officers,
agents or employees, shall be responsible to any other Beneficiary or to any
other Person for (a) the Company's solvency, financial condition or ability to
repay the Secured Debt or any portion thereof or any other indebtedness to any
Beneficiary, (b) any oral or written statements of the Company, or (c) the
validity, sufficiency or enforceability of the Secured Debt or any other
indebtedness to any Beneficiary, the Credit Documents or the security interests
and Liens granted by the Company to any Beneficiary. Each Beneficiary has
entered into its financing arrangement with the Company based upon such
Beneficiary's own independent investigation, and makes no warranty or
representation to any other Beneficiary, nor does such Beneficiary rely on any
warranty or representation of any other Beneficiary, with respect to the matters
referred to in this paragraph.
23. Authority. Each of the parties hereto hereby represents to the
other parties hereto that it has full right, power and authority to execute and
deliver this Agreement and to perform its obligations hereunder.
24. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY WAIVES ITS
RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. EACH PARTY REPRESENTS THAT IT HAS REVIEWED THIS WAIVER AND
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS. IN THE EVENT OF
LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.
25. No Waiver. The failure by any party hereto to exercise any right
hereunder shall not be construed as a waiver of the right to exercise the same
or any other right at any other time and from time to time thereafter, and such
rights shall be cumulative and not exclusive.
26. Headings. Paragraph headings used herein are for convenience only,
and shall not affect the meaning of any provision of this Agreement.
27. Exhibits. The exhibits attached to this Agreement are incorporated
herein and shall be considered part of this Agreement for all purposes
hereunder.
28. Assignment. Each of the Beneficiaries covenants that it has not
assigned or transferred, and agrees that it will not assign or transfer at any
time this Agreement remains in effect, any right, claim or interest of any kind
in or to the Collateral, unless such right, claim and interest remains subject
to this Agreement.
- 11 -
IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the date
first written above.
NOTES TRUSTEE:
▇.▇. ▇▇▇▇▇▇ TRUST COMPANY, NATIONAL
ASSOCIATION, as Trustee for the holders of
the notes under that certain Indenture,
dated as of June 18, 2002, between the
Issuer and the Trustee (each as defined
therein),
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Address: Corporate Trust Office
One Oxford Centre
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Institutional Trust Services
BOND TRUSTEE:
▇.▇. ▇▇▇▇▇▇ TRUST COMPANY, NATIONAL
ASSOCIATION, as Trustee for the holders of
the bonds under that certain Indenture of
Trust, dated as of June 18, 2002, between
the Issuer and the Trustee (each as defined
therein),
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Address: Corporate Trust Office
One Oxford Centre
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Institutional Trust Services
COLLATERAL AGENT:
▇.▇. ▇▇▇▇▇▇ TRUST COMPANY, NATIONAL
ASSOCIATION, as Collateral Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Address: Corporate Trust Office
One Oxford Centre
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Institutional Trust Services
CONSENT
The undersigned hereby consents to the terms of the foregoing
Collateral Agency and Second Lien Intercreditor Agreement and agrees to be bound
by the terms thereof.
WEIRTON STEEL CORPORATION,
a Delaware Corporation
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President Finance and
Administration
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
