Exhibit 10.4
INTERCREDITOR AGREEMENT
This INTERCREDITOR AGREEMENT, dated as of May 1, 2006, is entered into
among Citicorp, USA, Inc., as Administrative Agent for the lenders and issuers
under the Credit Agreement referred to below (in such capacity, the "Credit
Agreement Administrative Agent"), and The Bank of New York Trust Company, N.A.,
as trustee under the Collateral Trust Agreement referred to below (in such
capacity, the "Collateral Trustee").
WITNESSETH:
WHEREAS, WCI Steel, Inc., a Delaware corporation (formerly known as
WCI Steel Acquisition, Inc.) (the "Company"), certain of its subsidiaries, the
lenders and issuers party thereto from time to time and the Credit Agreement
Administrative Agent are entering into a Credit Agreement, dated as of May 1,
2006 (as such agreement may be amended, restated, supplemented, renewed or
otherwise modified from time to time, together with any other agreements
pursuant to which any of the Indebtedness, commitments, obligations, costs,
expenses, fees, reimbursements, indemnities or other obligations payable or
owing thereunder may be refinanced, restructured, renewed, extended, increased,
refunded or replaced, the "Credit Agreement");
WHEREAS, WCI Steel, Inc., in its capacity as Settlor, and the
Collateral Trustee entered into the Collateral Trust Agreement, dated as of May
1, 2006 (as such agreement may be amended, restated, supplemented, renewed or
otherwise modified from time to time, the "Collateral Trust Agreement");
WHEREAS, the Company and the United Steel, Paper and Forestry, Rubber,
Manufacturing, Energy Allied Industrial and Service Union, AFL-CIO (formerly
known as the United Steel Workers of America ("USW")) are entering into the
Collective Bargaining Agreement, dated as of April 30, 2006 (as such agreement
may be amended, restated, supplemented or otherwise modified from time to time,
the "CBA"), pursuant to which, among others, the Collateral Trustee is granted a
conditional second priority lien on certain assets of the Company subject to the
first priority lien of the Credit Agreement Administrative Agent under the
Credit Agreement, and the parties hereto wish to enter into this Agreement to
govern the rights of the parties with respect to such common collateral; and
WHEREAS, it is a condition to the initial extensions of credit under
the Credit Agreement that the parties hereto execute and deliver this Agreement;
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements contained herein, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Definitions
(a) Unless otherwise defined herein, terms are used herein as defined
in the Credit Agreement as in effect on the date hereof. In addition, as used in
this Agreement, the following terms shall have the following meanings (such
meanings to be equally applicable to both the singular and plural forms of the
terms defined):
"Agent" shall mean each of the Senior Agent and the Junior Agent.
"Agreement" shall mean this Intercreditor Agreement, as amended,
restated, supplemented or otherwise modified from time to time in accordance
with the terms hereof.
"Bankruptcy Code" shall mean title 11, United States Code.
"Bankruptcy Law" shall mean the Bankruptcy Code, or any similar
federal, state or foreign Requirement of Law for the relief of debtors or any
arrangement, reorganization, insolvency, moratorium, assignment for the benefit
of creditors, any other marshalling of the assets and liabilities of the Company
or any other Credit Party or any similar law relating to or affecting the
enforcement of creditors' rights generally.
"Collateral Documents" shall mean this Agreement, the Senior
Documents, the Junior Documents and all other security agreements, pledge
agreements, mortgages, guaranties and other documents executed and/or delivered
by the Credit Parties pursuant to which any Lien or security interest is created
or granted to secure any Secured Claims.
"Collateral Trust Agreement" shall have the meaning set forth in the
recitals to this Agreement.
"Collateral Trust Claims" shall mean all Indebtedness, obligations and
other liabilities (contingent or otherwise) of the Credit Parties arising under
or with respect to the Junior Documents or any of them.
"Collateral Trustee" shall include, in addition to the Collateral
Trustee referred to in the recitals hereto, any successors and assigns thereto
or any acting Collateral Trustee, in each case, as permitted under the
Collateral Trust Agreement.
"Company" shall have the meaning set forth in the recitals to this
Agreement.
"Credit Agreement" shall have the meaning set forth in the recitals to
this Agreement.
"Credit Agreement Administrative Agent" shall include, in addition to
the Credit Agreement Administrative Agent referred to in the recitals hereto,
(a) any successors and assigns thereto or any acting Credit Agreement
Administrative Agent, in each case, as permitted under the Credit Agreement, and
(b) if there is no acting Credit Agreement Administrative Agent, the Requisite
Lenders (as defined in the Credit Agreement).
"Credit Agreement Claims" shall mean all Indebtedness, Obligations and
other liabilities (contingent or otherwise) of the Credit Parties arising under
or with respect to the Senior Documents or any of them.
"Credit Agreement Collateral" shall have the meaning given such term
in the Pledge and Security Agreement.
"Credit Parties" shall mean each of the Company and each of its
Subsidiaries party from time to time to a Collateral Document.
"Enforcement Action" shall mean, with respect to the Senior Claims or
the Junior Claims, the exercise of, or joining with any other Person to
exercise, any rights and remedies with
2
respect to any Credit Agreement Collateral or the commencement or prosecution of
enforcement of any of the rights and remedies under, as applicable, the Senior
Documents or the Junior Documents, or applicable Requirement of Law, including
without limitation the exercise of any rights of set-off or recoupment, and the
exercise of any rights or remedies of a secured creditor under the UCC of any
applicable jurisdiction or under Bankruptcy Law.
"Insolvency or Liquidation Proceeding" shall mean, collectively, (a)
any voluntary or involuntary case or proceeding under the Bankruptcy Law with
respect to the Company or any other Credit Party, (b) any other voluntary or
involuntary insolvency, reorganization or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or proceeding
with respect to the Company or any other Credit Party or with respect to any of
their respective assets, (c) any liquidation, dissolution, reorganization or
winding up of the Company or any Credit Party, whether voluntary or involuntary
and whether or not involving insolvency or bankruptcy, (except as permitted by
Section 8.7 (Restrictions on Fundamental Changes) of the Credit Agreement), and
(d) any assignment for the benefit of creditors or any other marshaling of
assets and liabilities of the Company or any other Credit Party.
"Junior Agent" shall mean the Collateral Trustee.
"Junior Claims" shall mean with respect to any Credit Agreement
Collateral, all Collateral Trust Claims.
"Junior Documents" shall mean the Collateral Trust Agreement, the CBA,
each Open-End Mortgage, Assignment of Rents, Security Agreement and Fixture
Filing between the Company or any of its Subsidiarieas and the Collateral
Trustee and each other agreement, document or certificate executed by the
Company or any of its Subsidiaires and delivered to the Collateral Agent or USW
in connection with or pursuant to any of the foregoing.
"Junior Liens" shall mean all Liens on the Credit Agreement Collateral
securing the Collateral Trust Claims.
"Junior Secured Parties" shall mean the Persons holding the Collateral
Trust Claims.
"pay in full," "paid in full" or "payment in full" shall mean with
respect to any Secured Claims, the payment in full in cash of the principal of,
accrued (but unpaid) interest and premium, if any, on all such Secured Claims
and, with respect to letters of credit outstanding thereunder, delivery of cash
collateral or backstop letters of credit in respect thereof in compliance with
the relevant Collateral Documents, in each case, after or concurrently with
termination of all Commitments thereunder and payment in full in cash of any
other such Secured Claims that are due and payable at or prior to the time such
principal and interest are paid.
"Secured Claims" shall mean, collectively, the Credit Agreement Claims
and the Collateral Trust Claims.
"Secured Parties" shall mean, collectively, the Senior Secured Parties
and the Junior Secured Parties.
3
"Senior Agent" shall mean the Credit Agreement Administrative Agent
prior to the payment in full of the Credit Agreement Claims, and the Collateral
Trustee thereafter.
"Senior Claims" shall mean with respect to any Credit Agreement
Collateral, all Credit Agreement Claims. "Senior Claims" shall include (i) all
interest accrued or accruing (or which would, absent the commencement of an
Insolvency or Liquidation Proceeding, accrue) after the commencement of an
Insolvency or Liquidation Proceeding in accordance with and at the rate
specified in the Senior Documents whether or not the claim for such interest is
allowed as a claim in such Insolvency or Liquidation Proceeding, (ii) all Cash
Management Obligations, (ii) all Hedging Contract Obligations and (iv) all
indemnification Obligations. To the extent any payment with respect to the
Senior Claims (whether by or on behalf of any Credit Party, as proceeds of
security, enforcement of any right of setoff or otherwise) is declared to be
fraudulent or preferential in any respect, set aside or required to be paid to a
debtor in possession, trustee, receiver or similar Person, then the obligation
or part thereof originally intended to be satisfied shall be deemed to be
reinstated and outstanding as if such payment had not occurred.
"Senior Documents" shall mean Credit Agreement and any other Loan
Documents (as defined in the Credit Agreement).
"Senior Liens" shall mean all Liens on the Credit Agreement Collateral
securing the Credit Agreement Claims.
"Senior Secured Parties" shall mean the Persons holding the Credit
Agreement Claims.
"Uniform Commercial Code" or "UCC" shall mean the Uniform Commercial
Code of the applicable jurisdiction, as amended.
1.2 Certain Other Terms
(a) The terms "herein," "hereof," "hereto" and "hereunder" and similar
terms refer to this Agreement as a whole and not to any particular Article,
Section, subsection or clause in this Agreement.
(b) References herein to an Annex, Schedule, Article, Section,
subsection or clause, unless specifically stated otherwise, refer to the
appropriate Annex or Schedule to, or Article, Section, subsection or clause in
this Agreement.
(c) Where the context requires, provisions relating to any Credit
Agreement Collateral, when used in relation to any Credit Party, shall refer to
such Credit Party's Credit Agreement Collateral or any relevant part thereof.
(d) Any reference in this Agreement to any Collateral Document shall
include all appendices, exhibits and schedules thereto, and, unless specifically
stated otherwise, all amendments, restatements, supplements or other
modifications thereto, and as the same may be in effect at any time such
reference becomes operative.
(e) The term "including" shall mean "including, without limitation"
except when used in the computation of time periods.
4
(f) References in this Agreement to any statute shall be to such
statute as amended or modified and in effect from time to time.
SECTION 2. PRIORITY OF LIENS
2.1 Lien Subordination. Notwithstanding the date, manner or order of
grant, attachment or perfection of any Junior Lien or of any Senior Lien and
notwithstanding any provision of the UCC, any applicable Requirement of Law, any
Collateral Document, any alleged or actual defect or deficiency in any of the
foregoing or any other circumstance whatsoever, the Junior Agent, on behalf of
each Junior Secured Party, agrees that:
(a) any Senior Lien, regardless of how acquired, whether by grant,
statute, operation of law, subrogation or otherwise, shall be and shall remain
senior and prior to any Junior Lien (whether or not such Senior Lien is
subordinated to any Lien securing any other obligation); and
(b) any Junior Lien, regardless of how acquired, whether by grant,
statute, operation of law, subrogation or otherwise, shall be junior and
subordinate in all respects to any Senior Lien.
2.2 Prohibition on Contesting Liens. The Junior Agent, on behalf of
each Junior Secured Party, agrees that it shall not, and hereby waives any
right, prior to the payment in full of the Credit Agreement Claims, to:
(a) raise any objection or otherwise contest, or support any other
Person in raising any objection or contesting, in any proceeding (including any
Enforcement Action or Insolvency or Liquidation Proceeding or in any related
action or proceeding), the priority, validity or enforceability of any Senior
Lien (including the priority set forth herein with respect to any Junior Lien);
or
(b) demand, request, plead or otherwise assert or claim the benefit of
any marshalling, appraisal, valuation or other right which it may have under
applicable Requirements of Law in respect of the Credit Agreement Collateral or
the Senior Liens, except to the extent that such rights are expressly granted in
this Agreement.
2.3 New Liens.
(a) The Junior Agent agrees that, prior to the payment in full of the
Credit Agreement Claims, if the Junior Agent shall acquire any Lien on any
Credit Agreement Collateral that is not subject to a first-priority Lien of the
Senior Agent, the Junior Agent shall, upon demand by the Senior Agent,
notwithstanding anything to the contrary in any other Junior Documents, assign
such Lien to the Senior Agent as security for the Credit Agreement Claims (in
which case the Junior Agent may retain a junior lien on such Credit Agreement
Collateral subject to the terms hereof), and, at all times prior to such
assignment, the Junior Agent shall be acting as a sub-agent of the Senior Agent
for the sole purpose of perfecting the Lien on such asset.
(b) Each Credit Party hereby agrees not to grant, or to permit any of
its Subsidiaries to grant any Lien on any Credit Agreement Collateral securing
the Senior Claims or the Junior Claims, as the case may be, unless such Credit
Party or, as the case may be, such Subsidiary, has granted, through
documentation in form and substance satisfactory to the Senior
5
Agent, a Senior Lien on such asset in favor of the Senior Agent for the benefit
of the Senior Secured Parties as security for the Senior Claims.
2.4 Separate Liens. Each of the parties hereto acknowledges and agrees
that (i) the grants of Liens pursuant to the Collateral Documents constitute
separate and distinct grants of Liens and (ii) because of, among other things,
their differing rights in the Credit Agreement Collateral, the Junior Claims are
fundamentally different from the Senior Claims in respect of such Credit
Agreement Collateral, and the Junior Claims and Senior Claims must be separately
classified in any Insolvency Proceeding. To further effectuate the intent of the
parties as provided in the immediately preceding sentence, if it is held that
the Junior Claims and the Senior Claims in respect of such Credit Agreement
Collateral constitute only one secured claim (rather than separate classes of
senior and junior secured claims), then the Junior Secured Parties hereby
acknowledge and agree that all distributions shall be made as if there were
separate classes of senior and junior secured claims against the Credit Parties
(with the effect that, to the extent that the aggregate value of the Credit
Agreement Collateral is sufficient (for this purpose ignoring all claims held by
the Junior Secured Parties), the Senior Secured Parties shall be entitled to
receive, in addition to amounts distributed to them in respect of principal,
pre-petition interest and other claims, all amounts owing in respect of
post-petition interest before any distribution is made in respect of the claims
held by the Junior Secured Parties with respect to the Credit Agreement
Collateral, with the Junior Secured Parties hereby acknowledging and agreeing to
turn over to the Senior Secured Parties amounts otherwise received or receivable
by them to the extent necessary to effectuate the intent of this sentence, even
if such turnover has the effect of reducing the claim or recovery of the Junior
Secured Parties).
SECTION 3. EXERCISE OF REMEDIES
3.1 Remedies.
(a) Prior to the payment in full of the Senior Claims, whether or not
any Insolvency or Liquidation Proceeding has been commenced by or against any
Credit Party:
(i) no Junior Secured Party shall (or shall direct the Junior
Agent to) (A) exercise or seek to exercise any rights or remedies with
respect to the Credit Agreement Collateral, (B) institute any action
or proceeding with respect to such rights or remedies, including any
action of foreclosure, contest, protest with respect to the Credit
Agreement Collateral, (C) object to any foreclosure proceeding or
action brought by the Senior Agent or any Senior Secured Party or any
other exercise of any rights and remedies relating to the Credit
Agreement Collateral under the Senior Documents or otherwise, or (D)
object to the forbearance by the Senior Secured Parties from bringing
or pursuing any foreclosure proceeding or action or any other exercise
of any rights or remedies relating to the Credit Agreement Collateral;
and
(ii) the Senior Agent, on behalf of the Senior Secured Parties,
shall have the exclusive right to enforce rights, exercise remedies
and make determinations regarding release, disposition (including
under Section 363(f) of the Bankruptcy Code) or restrictions with
respect to the Credit Agreement Collateral without any consultation
with, or the consent of, any Junior Secured Party.
(b) In exercising rights and remedies with respect to any Credit
Agreement Collateral, the Senior Agent, on behalf of the Senior Secured Parties,
in respect of such Credit
6
Agreement Collateral may enforce the provisions of the Senior Documents and
exercise remedies thereunder, all in such order and in such manner as they may
determine in the exercise of their sole discretion. Such exercise and
enforcement shall include, without limitation, the rights of an agent appointed
by them to sell or otherwise dispose of such Credit Agreement Collateral upon
foreclosure, to incur expenses in connection with such sale or disposition, and
to exercise all the rights and remedies of a secured lender under the UCC of any
applicable jurisdiction and of a secured creditor under any Bankruptcy Law.
(c) The Junior Agent, on behalf of each Junior Secured Party, agrees
that, prior to the payment in full of the Senior Claims, it will not take or
receive any such Credit Agreement Collateral or any proceeds of the Credit
Agreement Collateral in connection with the exercise of any right or remedy
(including setoff) with respect to such Credit Agreement Collateral. Without
limiting the generality of the foregoing, prior to the payment in full of the
Senior Claims, the sole right of the Junior Agent and the Junior Secured Parties
with respect to such Credit Agreement Collateral shall be the right to receive a
share of the proceeds thereof pursuant to Section 4.1 (Proceeds of Collateral).
(d) The Junior Agent, on behalf of each Junior Secured Party (i)
agrees that neither it nor any Junior Secured Party will take any action that
would hinder any exercise of remedies undertaken by any Senior Secured Party
under the Collateral Documents, including any sale, lease, exchange, transfer or
other disposition of such Credit Agreement Collateral, whether by foreclosure or
otherwise, and (ii) hereby waives any and all rights it or any Junior Secured
Party may have as a junior creditor or otherwise to object to the manner in
which any Senior Secured Party may seek to enforce or collect the Senior Claims
or the Liens granted in any of such Collateral.
3.2 Exercise of Remedies as Unsecured Creditors. Notwithstanding
anything to the contrary in this Agreement, each Junior Secured Party may
exercise its rights and remedies as an unsecured creditor, and with respect to
Collateral which the Credit Agreement Administrative Agent has a junior priority
Lien in accordance with the Pledge and Security Agreement and the Mortgages, as
secured creditor, against the Credit Parties in accordance with the terms of the
Junior Documents and applicable Requirement of Law. In the event any Junior
Secured Party becomes a judgment lien creditor in respect of any Credit
Agreement Collateral as a result of its enforcement of its rights as an
unsecured creditor, such judgment lien shall be subordinated to any Lien on such
Credit Agreement Collateral securing any Senior Claim on the same basis and to
the same extent as the other Liens on such Credit Agreement Collateral securing
the Junior Claims are subordinated to those securing the Senior Claims under
this Agreement. Nothing in this Agreement modifies any rights or remedies which
any Senior Secured Party may have with respect to such Credit Agreement
Collateral.
SECTION 4. APPLICATION OF PAYMENTS; SUBROGATION
4.1 Proceeds of Collateral. Proceeds of any Credit Agreement
Collateral received by any party hereto in connection with or resulting from any
Enforcement Action, and whether or not pursuant to an Insolvency or Liquidation
Proceeding, shall be applied by the Senior Agent to the Senior Claims in such
order as specified in the Senior Documents until payment in full of all Senior
Claims. After payment in full of all Senior Claims, the Senior Agent shall
deliver to the Junior Agent any proceeds of the Credit Agreement Collateral held
by it in the same for as received, with any necessary endorsements or as a court
of competent jurisdiction may otherwise direct.
7
4.2 Payments Over. Any Credit Agreement Collateral or proceeds thereof
received by the Junior Agent in connection with the exercise of any right or
remedy (including setoff) relating to the Credit Agreement Collateral in
contravention of this Agreement shall be segregated and held in trust and
forthwith paid over to the Senior Agent for the benefit of the Senior Secured
Parties in the same form as received, with any necessary endorsements or as a
court of competent jurisdiction may otherwise direct.
4.3 Subrogation. The Junior Agent, on behalf of each Junior Secured
Party, hereby waives any rights of subrogation it may acquire as a result of any
payment hereunder until the Senior Claims shall have been paid in full. Upon
payment in full of such Senior Claims, the Junior Secured Parties shall be
subrogated to the rights of the Senior Secured Parties to receive payments or
distributions applicable to such Senior Claims.
SECTION 5. INSOLVENCY OR LIQUIDATION PROCEEDINGS
5.1 Waivers. In the event an Insolvency or Liquidation Proceeding
shall be commenced by or against any Credit Party, each of the Junior Secured
Parties hereby agrees that such Person shall not, until the payment in full of
the Senior Claims (irrespective of whether the Senior Claims are scheduled to be
paid in full as part of an applicable Insolvency Proceeding):
(a) seek any relief from, or modification of, the automatic stay as
provided in Section 362 of the Bankruptcy Code (or any similar provision of
Bankruptcy Law) or seek or accept any form of adequate protection under either
or both of Section 362 and Section 363 of the Bankruptcy Code;
(b) oppose or object to the use of any Credit Agreement Collateral
constituting cash collateral by any Credit Party;
(c) oppose or object to any financing with respect to any Credit Party
provided under any Bankruptcy Law (regardless of whether any Indebtedness
thereunder is senior to the Junior Claims or secured by Liens on the Credit
Agreement Collateral that are senior in priority to the Junior Liens on the
Credit Agreement Collateral) including any refinancing of the entire amount of
the Credit Agreement Claims, unless the Senior Agent or the Senior Secured
Parties shall have opposed or objected to such financing;
(d) object to any item set forth in Section 2.2(a) (Prohibition on
Contesting Liens) hereof (irrespective of whether the Senior Claims are
scheduled to be paid in full as part of an applicable Insolvency Proceeding),
including (i) the amount of the Senior Claims allowed or permitted to be
asserted under any Bankruptcy Law or (ii) the extent to which the Senior Claims
are deemed secured claims, including under Section 506(a) of the Bankruptcy
Code;
(e) oppose or object to (i) any protection provided to the Senior
Secured Parties, including any form of adequate protection under Section 362 or
Section 363 of the Bankruptcy Code and the payment of amounts equal to interest
and expenses allowed under Section 506(b) and (c) of the Bankruptcy Code to any
Senior Secured Parties; or (ii) any consent or objection by the Senior Agent to
any motion, relief, action or proceeding based on any Person (including any
Senior Secured Party) claiming a lack of such adequate protection;
(f) object to the treatment of the Senior Claims under a chapter 11
plan of reorganization under the Bankruptcy Code or similar plan or
reorganization or arrangement under any other applicable Insolvency or
Liquidation Proceeding;
8
(g) oppose or object to any proposed sale of the Credit Agreement
Collateral pursuant to Section 363 of the Bankruptcy Code or any similar
provision of any applicable Bankruptcy Law; or
(h) object to or oppose any use of Credit Agreement Collateral
constituting cash collateral by any Loan Party.
5.2 No Waiver by Senior Secured Parties. Nothing contained herein
shall prohibit or in any way limit any Senior Secured Party from objecting in
any Insolvency or Liquidation Proceeding (or otherwise) to any action taken by
any Junior Secured Party, including the seeking by such Junior Secured Party of
adequate protection or the asserting by such Junior Secured Party of any of its
rights and remedies under the Junior Documents (or otherwise) with respect to
such Collateral.
SECTION 6. REPRESENTATIONS AND WARRANTIES
Each party hereto represents and warrants as follows:
(a) Such party is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization and has all
requisite power and authority to enter into and perform its obligations under
this Agreement.
(b) This Agreement has been duly executed and delivered by such party
and constitutes a legal, valid and binding obligation of such party, enforceable
in accordance with its terms; except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
rights of creditors generally and by general principles of equity.
(c) The execution, delivery and performance by such party of this
Agreement (i) do not require any consent or approval of, registration or filing
with or any other action by any governmental authority and (ii) will not violate
any applicable Requirement of Law or regulation or the charter, by-laws or other
organizational documents of such party or any order of any governmental
authority or any indenture, agreement or other instrument binding upon such
party.
SECTION 7. ACKNOWLEDGEMENTS AND CONSENTS
7.1 Reliance by Senior Secured Parties. The consent by the Senior
Secured Parties to the execution and delivery of the Junior Documents and the
grant of a Junior Lien on the Credit Agreement Collateral and all loans and
other extensions of credit made or deemed made on and after the date hereof by
the Senior Secured Parties to the Company shall be deemed to have been given and
made in reliance upon this Agreement.
7.2 Independent Analysis. The Junior Agent, on behalf of each Junior
Secured Party, acknowledges that it and each Junior Secured Party has,
independently and without reliance on the Senior Agent or any Senior Secured
Party, and based on documents and information deemed by it appropriate, made its
own credit analysis and decision to enter into this Agreement, the Junior
Documents, and the transactions contemplated hereby and thereby and agrees that
it will continue to make its own credit decision in taking or not taking any
action under the Junior Documents or this Agreement.
9
7.3 No Warranties or Liability. The Junior Agent, on behalf of each
Junior Secured Party, acknowledges and agrees that:
(a) no Senior Secured Party has made any express or implied
representation or warranty, including with respect to the execution, validity,
legality, completeness, collectibility or enforceability of any Senior Document;
(b) the Senior Secured Parties will be entitled to manage and
supervise their respective indebtedness of the Company as they may, in their
sole discretion, deem appropriate and without regard to any rights or interests
that any Junior Secured Party may have in the Credit Agreement Collateral or
otherwise, except as otherwise provided in this Agreement or under applicable
Requirement of Law; and
(c) no Senior Secured Party shall have any duty to any Junior Secured
Party to act or refrain from acting in a manner which allows, or results in, the
occurrence or continuance of an event of default or default under any agreements
with any Credit Party (including the Junior Documents), regardless of any
knowledge thereof which they may have or be charged with.
7.4 No Waiver of Lien Priorities.
(a) No right of any Senior Secured Party to enforce any provision of
this Agreement shall at any time in any way be prejudiced or impaired by any act
or failure to act on the part of any Credit Party or by any act or failure to
act by any Senior Secured Party, or by any noncompliance by any Person with the
terms, provisions and covenants of this Agreement, any of the Senior Documents
or any of the Junior Documents, regardless of any knowledge thereof which any
Senior Secured Party may have or be otherwise charged with.
(b) Without in any way limiting the generality of the foregoing clause
(a) (except as set forth in any Senior Document), each Senior Secured Party,
may, at any time and from time to time, without the consent of, or notice to,
any Junior Secured Party, without incurring any liability to any Junior Secured
Party and without impairing or releasing the lien priorities and other benefits
provided in this Agreement (even if any right of subrogation or other right or
remedy of any Junior Secured Party is affected, impaired or extinguished
thereby) do any one or more of the following except as otherwise expressly
prohibited or conditioned herein:
(i) change the manner, place or terms of payment or change or
extend the time of payment of, or renew, exchange, amend, increase or
alter, the terms of any Senior Claim, any Lien in respect of the
Credit Agreement Collateral, any guaranty of any Senior Claim, or any
liability of any Credit Party incurred directly or indirectly in
respect of any of the foregoing (including any increase in or
extension of the Senior Claims, without any restriction as to the
amount, tenor or terms of any such increase or extension) or otherwise
amend, renew, exchange, extend, modify or supplement in any manner the
Senior Claims, any Liens held by the Senior Agent, the Senior Secured
Parties, or any of the Senior Documents;
(ii) sell, exchange, release, surrender, realize upon, enforce or
otherwise deal with in any manner and in any order any part of the
Credit Agreement Collateral or any liability of any Credit Party to
the Senior Agent or any Senior Secured Party, or any liability
incurred directly or indirectly in respect thereof;
10
(iii) settle or compromise any Senior Claim or any other
liability of any Credit Party or any security therefor or any
liability incurred directly or indirectly in respect thereof and apply
any sums by whomsoever paid and however realized to any liability
(including the Senior Claims) in any manner or order; and
(iv) exercise or delay in or refrain from exercising any right or
remedy against any security or any Credit Party or any other Person,
elect any remedy and otherwise deal freely with the Credit Parties,
the Credit Agreement Collateral and any security, any guarantor or any
liability of any Credit Party to any Senior Secured Party, or any
liability incurred directly or indirectly, in respect of the
foregoing;
(c) The Junior Agent, on behalf of each Junior Secured Party, also
agrees that no Senior Secured Party shall have any duty or liability to any
Junior Secured Party, and the Junior Agent, on behalf of each Junior Secured
Party, hereby waives all claims against each Senior Secured Party arising out of
any and all actions which any Senior Secured Party may take or permit or omit to
take with respect to: (i) the Senior Documents, (ii) the collection of the
Senior Claims, (iii) the foreclosure upon, or sale, liquidation or other
disposition of, the Credit Agreement Collateral, (iv) the release of any Lien in
respect of any Credit Agreement Collateral, or (v) the maintenance or
preservation of the Credit Agreement Collateral, the Senior Claims or otherwise;
and
(d) The Junior Agent, on behalf of each Junior Secured Party, agrees
not to assert and hereby waives, to the fullest extent permitted by law, any
right to demand, request, plead or otherwise assert or otherwise claim the
benefit of, any marshalling, appraisal, valuation or other similar right that
may otherwise be available under applicable Requirement of Law or any other
similar rights a junior secured creditor may have under applicable Requirement
of Law in respect of any Credit Agreement Collateral.
7.5 Obligations Unconditional. All rights, interests, agreements and
obligations hereunder of the Senior Agent and the Senior Secured Parties and the
Junior Agent and the Junior Secured Parties shall remain in full force and
effect regardless of:
(a) any lack of validity or enforceability of any Senior Document or
any Junior Document and regardless of whether the Liens of the Senior Agent and
Senior Secured Parties are not perfected or are voidable for any reason;
(b) any change in the time, manner or place of payment of, or in any
other terms of, all or any of the Senior Claims or Junior Claims, or any
amendment or waiver or other modification, including any increase in the amount
thereof, whether by course of conduct or otherwise, of the terms of any Senior
Document or any Junior Document;
(c) any exchange, release or lack of perfection of any Lien on any
Credit Agreement Collateral or any other asset, or any amendment, waiver or
other modification, whether in writing or by course of conduct or otherwise, of
all or any of the Senior Claims or Junior Claims or any guarantee thereof;
(d) the commencement of any Insolvency or Liquidation Proceeding in
respect of any Credit Party; or
11
(e) any other circumstances which otherwise might constitute a defense
available to, or a discharge of, any Credit Party in respect of any Secured
Claim or of any Junior Secured Party in respect of this Agreement.
7.6 Releases. If in connection with:
(a) the exercise of the Senior Agent's remedies in respect of the
Credit Agreement Collateral provided for in Section 3.1 (Remedies), including
any sale, lease, exchange, transfer or other disposition of such Credit
Agreement Collateral;
(b) any sale, lease, exchange, transfer or other disposition of Credit
Agreement Collateral permitted under the terms of the Credit Agreement (whether
or not an event of default under, and as defined therein, has occurred and is
continuing); or
(c) any agreement between the Senior Agent and the Company to release
the Senior Agent's Lien on any portion of the Credit Agreement Collateral or to
release any Subsidiary Guarantor from its obligations under its guaranty of the
Senior Claims;
the Senior Agent, for itself or on behalf of any of the Senior Secured Parties,
releases any of its Liens on any part of the Credit Agreement Collateral (or any
Subsidiary Guarantor from its obligations under its guaranty of the Senior
Lender Claims), the Liens, if any, of the Junior Agent, for itself or for the
benefit of the Junior Secured Parties, on such Credit Agreement Collateral (and
the obligations of such Subsidiary Guarantor under its guaranty of the Junior
Claims, if any) shall be automatically, unconditionally and simultaneously
released and the Junior Agent, for itself or on behalf of any such Junior
Secured Party, promptly shall execute and deliver to the Senior Agent or the
Company such termination statements, releases and other documents as the Senior
Agent or the Company may request and provide to effectively confirm such
release.
7.7 Attorney-in-Fact.
(a) The Junior Agent, on behalf of each Junior Secured Party hereby
irrevocably constitutes and appoints the Senior Agent and any officer or agent
of such Senior Agent, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the place and
stead of the Junior Agent or such holder or in such Senior Agent's own name,
from time to time in such Senior Agent's discretion, for the purpose of carrying
out the terms of this Agreement, to take any and all appropriate action and to
execute any and all documents and instruments which may be necessary or
desirable to accomplish the purposes of this Agreement, including any financing
statements, endorsements or other instruments or transfer or release.
Notwithstanding the grant of the foregoing power of attorney, nothing in this
Section 7.7 is intended to in any way relieve any Credit Party of its
obligations to comply with Requirements of Law or applicable obligations with
respect to the release of Credit Agreement Collateral under any Collateral
Document.
(b) Without limiting the generality of the foregoing, the Junior Agent
hereby gives the Senior Agent and any officer and agent thereof the power and
right, on behalf of each Junior Secured Party, without notice to or assent by
any Junior Secured Party, to do, prior to the payment in full of the Senior
Claims, any of the following with respect to the Credit Agreement Collateral, to
the extent such Junior Secured Party would be permitted to do so under the
Collateral Documents:
12
(i) file of any financing or continuation statement under the UCC
or other similar applicable Requirement of Law;
(ii) take possession of, and indorse and collect, either in the
name of such Junior Secured Party or its own name, any item that is
required to be turned over to the Senior Agent pursuant to Section 4.2
(Payments Over); and
(iii) execute, in connection with any release of any Credit
Agreement Collateral described in Section 7.6 (Releases) for which
such Junior Secured Party is obligated under such Section 7.6
(Releases) to release or subordinate its Junior Liens, any
termination, partial release, endorsement, assignment, other
instrument of conveyance or transfer, any subordination agreement or
any other document with respect to such Credit Agreement Collateral
necessary or appropriate to effect such release or subordination.
(c) Each Junior Secured Party hereby ratifies all that said attorneys
shall lawfully do or cause to be done by virtue hereof. All powers,
authorizations and agencies contained in this Agreement are coupled with an
interest and are irrevocable until such time as the Secured Claims are
indefeasibly paid and satisfied in full, and thereafter such powers,
authorizations and agencies shall terminate.
7.8 Consent of Credit Parties. Each Credit Party hereby consents to
the provisions of this Agreement and the intercreditor arrangements provided for
herein and agrees that the obligations of the Credit Parties under any Senior
Document, Junior Document or other Collateral Document shall not in any way be
diminished or otherwise affected by such provisions or arrangements. All
references to any Credit Party shall include reference to such Credit Party as a
debtor and debtor in possession and any receiver or trustee for such Loan Party
in any Insolvency or Liquidation Proceeding. Each Credit Party hereby agrees
that, if, pursuant to Section 7.11 (Additional Collateral and Guarantees) of the
Credit Agreement, the Company shall be required to cause any Subsidiary that is
not a Credit Party to become a Credit Party, or if for any reason the Company
desires any such Subsidiary to become a Credit Party, such Subsidiary shall
execute and deliver to the Agents an Intercreditor Supplement in substantially
the form of Exhibit B (Intercreditor Supplement) attached hereto and shall
thereafter for all purposes be a party hereto and have the same rights, benefits
and obligations as a Credit Party hereto on the Closing Date.
SECTION 8. MISCELLANEOUS
8.1 Conflicts. Except as expressly provided herein, in the event of
any conflict between the provisions of this Agreement and the provisions of the
Collateral Documents, the provisions of this Agreement shall govern.
8.2 Continuing Nature.
(a) This Agreement is a continuing agreement of lien subordination and
the Senior Secured Parties may continue, at any time and without notice to any
Junior Secured Party, to extend credit and other financial accommodations and
lend monies constituting Senior Claims on the faith hereof, and this Agreement
shall continue to be effective until the payment in full of all Secured Claims
irrespective of, and no right or remedy of any Senior Secured Party under this
Agreement shall be prejudiced or impaired at any time by, any of the following:
(a) any action described in Section 8.3 (Amendments; Waivers), Section 8.4
(Legends) or Section 3.1(b)
13
(Exercise of Remedies), (b) any lack of validity or enforceability of any
Collateral Documents, (c) the commencement of any Insolvency Proceeding or any
other Enforcement Action, (d) any act or failure to act on the part of any
Credit Party or Senior Secured Party, (e) any noncompliance by any Person with
the terms, provisions and covenants of this Agreement or any Collateral
Document, regardless of any knowledge thereof that any Senior Secured Party may
have or be otherwise charged with or (f) any other circumstances that otherwise
might constitute a defense available to, or a discharge of, any Credit Party in
respect of any Senior Claims or of any Junior Secured Party in respect of this
Agreement or any Junior Document. The terms of this Agreement shall survive, and
shall continue in full force and effect, in any Insolvency or Liquidation
Proceeding.
(b) All consents, waivers and other provisions set forth herein for
the benefit of the Senior Secured Parties are irrevocable (except in a writing
signed by the Senior Secured Parties as provided in Section 8.3 (Amendments;
Waivers)), and each Junior Secured Party and Loan Party hereby waives any right
under applicable Requirements of Law to revoke any such consent, waiver or other
provision of this Agreement.
8.3 Amendments; Waivers.
(a) No amendment, modification or waiver of any provision of this
Agreement shall be deemed to be made unless the same shall be in writing signed
by each Agent and (ii) shall have been approved by the Requisite Lenders (other
than any amendments or modifications requested by any successor Senior Agent not
adversely affecting the Secured Parties) pursuant to Section 11.1 (Amendments,
Waivers, Etc.) of the Credit Agreement. Notwithstanding anything to the
contrary, the consent of any Credit Party shall not be required for amendments,
modifications or waivers of the provisions of this Agreement, except that the
Company's consent shall be required for those that (i) affect any obligation or
right of any Credit Party hereunder or that would impose any additional
obligations on any Credit Party (including such changes under this Section 8.3),
(ii) change the rights of the Credit Parties to make payments in respect of any
Secured Claims (except with respect to proceeds of Credit Agreement Collateral
in an Enforcement Action). In the case of a waiver of any provision of this
Agreement, such waiver shall be effective only with respect to the specific
instance involved and shall in no way impair the rights of the parties making
such waiver or the obligations of the other parties in any other respect or at
any other time. The Agents shall notify the Company of any amendment,
modification or waiver effected hereunder; provided, however, that the failure
of any Agent to deliver such notice shall not render any such amendment,
modification or waiver ineffective.
(b) Without the prior written consent of the Senior Agent, no Junior
Document may be amended, supplemented or otherwise modified or refinanced, and
no new Junior Document may be entered into, in each case if the effect of such
amendment, supplement, modification, refinancing or new Junior Document is to do
any of the following:
(i) change or amend any other term if such change or amendment
would have an adverse effect on the rights and obligations of any
Senior Secured Party or the Senior Agent with respect to the Credit
Agreement Collateral; or
(ii) contravene any provision of this Agreement.
14
8.4 Legends. Each Junior Document pursuant to which a Lien is granted
or under which rights or remedies with respect to any Lien on the Credit
Agreement Collateral are governed shall include the following language:
Notwithstanding anything herein to the contrary, certain liens and
security interest granted pursuant to this Agreement and the exercise
of any right or remedy hereunder are subject to the provisions of the
Intercreditor Agreement, dated as of ___________, 2006 (the
"Intercreditor Agreement") among Citicorp, USA, Inc., as senior agent,
The Bank of New York Trust Company, N.A., as junior agent and WCI
Steel Acquisition, Inc., and certain of its subsidiaries as credit
parties. In the event of any conflict between the terms of the
Intercreditor Agreement and this agreement, the terms of the
Intercreditor Agreement shall govern.
8.5 No Duties. The Senior Agent and the Senior Secured Parties shall
have no obligation whatsoever to any Junior Secured Party to ensure that the
Credit Agreement Collateral in their possession or under their control is
genuine or owned by any Credit Party or to preserve the rights or benefits of
any Person except as expressly set forth in this Agreement. None of the Senior
Agent or any Senior Secured Party shall have, by reason of this Agreement, any
Collateral Document or any other document, a fiduciary relationship with any
Junior Secured Party.
8.6 Consent to Jurisdiction; Waiver of Trial by Jury.
(a) Any legal action or proceeding with respect to this Agreement or
any other Collateral Document may be brought in the courts of the State of New
York located in the City of New York or of the United States of America for the
Southern District of New York, and, by execution and delivery of this Agreement,
each party hereto hereby accepts for itself and in respect of its property,
generally and unconditionally, the jurisdiction of the aforesaid courts. The
parties hereto hereby irrevocably waive, to the fullest extent permitted by law,
any objection, including any objection to the laying of venue or based on the
grounds of forum non conveniens, that any of them may now or hereafter have to
the bringing of any such action or proceeding in such respective jurisdictions.
(b) Each party hereto hereby irrevocably consents, to the fullest
extent permitted by law, to the service of any and all legal process, summons,
notices and documents in any suit, action or proceeding brought in the United
States of America arising out of or in connection with this Agreement by the
mailing (by registered or certified mail, postage prepaid) or delivering of a
copy of such process to such party at its address specified in Section 8.7
(Notices). Each party hereto agrees, to the fullest extent permitted by law,
that a final judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law.
(c) Nothing contained in this Section 8.6 shall affect the right of
any Agent or any Secured Party to serve process in any other manner permitted by
law or commence legal proceedings or otherwise proceed against the Company or
any other Credit Party in any other jurisdiction.
15
(d) EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES TRIAL BY JURY IN ANY
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT.
8.7 Notices. Any notice or other communication herein (i) to the
Senior Agent or any Credit Party shall be made in accordance with Section 11.8
(Notices, Etc.) of the Credit Agreement and (ii) to the Junior Agent shall be
sent to 000 Xxxxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxx, XX 00000, Attn: Xxxxx Xxxxxx.
8.8 Governing Law. This Agreement has been delivered and accepted at
and shall be deemed to have been made at New York, New York and shall be
interpreted, and the rights and liabilities of the parties bound hereby
determined, in accordance with the laws of the State of New York.
8.9 Specific Performance. The Senior Agent and the Secured Parties may
demand specific performance of this Agreement. The Junior Agent, on behalf of
each Junior Secured Party, hereby irrevocably waive any defense based on the
adequacy of a remedy at law and any other defense which might be asserted to bar
the remedy of specific performance in any action which may be brought by the
Senior Agent or any Senior Secured Party.
8.10 Section Titles. The section titles contained in this Agreement
are and shall be without substantive meaning or content of any kind whatsoever
and are not a part of this Agreement.
8.11 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be an original and all of which shall together
constitute one and the same document. Signature pages may be detached from
multiple separate counterparts and attached to a single counterpart so that all
signature pages are attached to the same document.
8.12 No Third Party Beneficiaries. This Agreement shall be binding
upon, and the rights and benefits hereof shall inure to the benefit of, the
Secured Parties and each of their respective permitted successors and assigns,
and no other Person shall have or be entitled to assert rights or benefits
hereunder (except the Credit Parties solely with respect to Section 8.2 (b)
(Continuing Nature), as to which Section each Credit Party is an express third
party beneficiary). To the extent applicable, this Agreement shall be binding
upon the Credit Parties and their respective permitted successors and assigns,
and each Credit Party shall cause each of its Subsidiaries, to the extent such
Subsidiary becomes or is required to become a Credit Party, to comply with the
terms of this Agreement.
8.13 Further Assurances. Each of the Credit Parties and the Junior
Agent, on behalf of each Junior Secured Party, agrees that each such Person
shall, at the Credit Parties' expense, take such further action and execute and
deliver to the Agents and the Senior Agent, on behalf of each Senior Secured
Party, such additional documents and instruments (in recordable form, if
requested), in each case, as the Senior Agent may reasonably request to
effectuate the terms of this Agreement.
[SIGNATURE PAGES FOLLOW]
16
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
CITICORP USA, INC.,
as Senior Agent
By: /s/ Xxxxx Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: Director/Vice President
THE BANK OF NEW YORK TRUST COMPANY, N.A.,
as Junior Agent
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
[SIGNATURE PAGE TO INTERCREDITOR AGREEMENT]
ACCEPTED AND AGREED this 1st day of
May, 2006
WCI STEEL ACQUISITION, INC.
By: /s/ Xxxxxxx Xxxxx
-------------------------------------
Name: Xxxxxxx Xxxxx
Title: President:
WCI STEEL METALLURGICAL SERVICES
ACQUISITION, INC.
By: /s/ Xxxxxxx Xxxxx
-------------------------------------
Name: Xxxxxxx Xxxxx
Title: President
WCI STEEL PRODUCTION CONTROL SERVICES
ACQUISITION, INC.
By: /s/ Xxxxxxx Xxxxx
-------------------------------------
Name: Xxxxxxx Xxxxx
Title: President
YOUNGSTOWN SINTER ACQUISITION COMPANY
By: /s/ Xxxxxxx Xxxxx
-------------------------------------
Name: Xxxxxxx Xxxxx
Title: President
WCI STEEL SALES ACQUISITION, L.P.
By: WCI STEEL PRODUCTION CONTROL SERVICES
ACQUISITION, INC., its General
Partner
By: /s/ Xxxxxxx Xxxxx
-------------------------------------
Name: Xxxxxxx Xxxxx
Title: President
[SIGNATURE PAGE TO INTERCREDITOR AGREEMENT]
