EXHIBIT 10.12
INTERCREDITOR AGREEMENT
THIS INTERCREDITOR AGREEMENT (which, together with all extensions and
renewals hereof, all modifications and amendments hereto, and all substitutions
and replacements herefor, is hereinafter referred to as the "Agreement"), is
dated as of May 20, 2004, and is made and entered into by and among THE DIRECTOR
OF THE DEPARTMENT OF DEVELOPMENT OF THE STATE OF OHIO, acting for and on behalf
of the State of Ohio (the "Director"), whose mailing address is 00 Xxxxx Xxxx
Xxxxxx, X.X. Xxx 0000, Xxxxxxxx, Xxxx 00000-0000 (Attention: Loan Servicing),
and whose telecopier number is (000) 000-0000, GENERAL ELECTRIC CAPITAL
CORPORATION, acting in its capacity as agent, on behalf of itself and the other
Lenders (as hereinafter defined) (the "Agent"), under that certain Credit
Agreement dated as May 20, by and among, the Agent, the Borrower (as hereinafter
defined), and certain other persons signatory thereto, (as amended, restated,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
whose mailing address is 000 Xxxx Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxx, XX 00000
(Attention: Republic Steel Account Manager), and whose telecopier number is
(000) 000-0000, with copies to both Winston & Xxxxxx LLP, whose mailing address
is 00 Xxxx Xxxxxx Xxxxx, Xxxxxxx, XX 00000 (Attention: Xxxxxx X. Xxxxxxxx) and
whose telecopier number is (000) 000-0000 and General Electric Capital
Corporation, 000 Xxxxxxx 0, Xxxxxxxx Xxxxxxxxxxx 00000 (Attention: Corporate
Counsel-Commercial Finance) and whose telecopier number is (000) 000-0000,
REPUBLIC ENGINEERED PRODUCTS, INC., a Delaware corporation (the "Borrower"),
whose mailing address is 0000 Xxxxxxx Xxxxxxx, Xxxxx, Xxxx 00000 (Attention:
Chief Executive Officer), and whose telecopier number is (000) 000-0000, PAV
REPUBLIC, INC., a Delaware corporation (the "Parent") whose mailing address is
0000 Xxxxxxx Xxxxxxx, Xxxxx, Xxxx 00000 (Attention: Chief Executive Officer),
and whose telecopier number is (000) 000-0000, PAV RAILROAD, INC., a Delaware
corporation ("Railroad") whose mailing address is 0000 Xxxxxxx Xxxxxxx, Xxxxx,
Xxxx 00000 (Attention: Chief Executive Officer), and whose telecopier number is
(000) 000-0000, and PAV MACHINE, LLC, a Delaware limited liability company
("Machine") whose mailing address is 0000 Xxxxxxx Xxxxxxx, Xxxxx, Xxxx 00000
(Attention: Chief Executive Officer), and whose telecopier number is (330)
670-3020 (the Borrower, Parent, Railroad and Machine are collectively referred
to herein as the "Companies").
RECITALS:
WHEREAS, the Director has made a loan to the Borrower in the original
principal amount of $5,000,000 (the "State Loan"), which loan is secured by a
security interest in the property described in Exhibit A hereto (the "Shared
Collateral") and is evidenced by a Loan Agreement dated as of March 20, 2003
between the Director and the Borrower (the "Director Loan Agreement"; and
together with all other documents or instruments evidencing or securing the
State Loan hereinafter collectively referred to as the "State Loan Documents");
and
WHEREAS, the lenders under the Credit Agreement have agreed to make loans
and provide credit to the Borrower pursuant to the Credit Agreement and the
Companies (other than the Borrower) have guaranteed the Borrower's and any other
Company's obligations (the "Working Capital Obligations") thereunder and under
any other Working Capital Loan Document (as hereinafter defined);
WHEREAS, the Credit Agreements together with all other documents or
instruments evidencing or securing the Working Capital Obligations are
hereinafter collectively referred to as the "Working Capital Loan Documents";
WHEREAS, the obligations of the Companies under the Working Capital Loan
Documents are secured by, among other things, a lien upon and a security
interest in the Shared Collateral;
WHEREAS, the Director and the Agent wish to enter into this Agreement for
the purpose of setting forth certain agreements between themselves with respect
to the matters set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound
hereby, the Director and the Agent hereby covenant and agree as follows:
1. Incorporation of Recitals. The Recitals to this Agreement are
incorporated herein by this reference.
2. Definitions. (a) "Hereof," "herein, "hereunder" and "hereto" and words
of similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and article,
section, subsection, paragraph, item, exhibit, and schedule references are to
this Agreement unless otherwise specified. All terms defined in this Agreement
in the singular shall have comparable meanings when used in the plural and vice
versa unless other specified.
(b) As used herein the following terms shall have the meanings set forth
below:
"Lenders" shall mean the lenders from time to time party to the
Credit Agreement.
"Security Documents" shall mean the State Loan Documents and the
Working Capital Loan Documents.
3. Shared Lien and Security Interest. Irrespective of (a) the time, order
or method of attachment or perfection of the respective security interests
and/or other liens granted to the Director or the Agent in or on any or all of
the property or assets of any of the Companies, including the Shared Collateral,
(b) the time or manner of the filing of their respective financing statements,
(c) the possession of any portion of the Shared Collateral, (d) the dating,
execution or delivery of any agreement granting to the Director or the Agent any
security interests and/or other liens in or on any or all of the assets and/or
property of any of the Companies, including the Shared Collateral, (e) the
giving of notice or the failing to give notice of any of the above, and (f) any
provision of law to the contrary, the Director and the Agent shall share a lien
on the Shared Collateral; provided that the Agent's lien on the Shared
Collateral shall be subordinate to the Director's lien on the Shared Collateral.
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4. Action to Be Taken upon Occurrence of Event of Default. The Agent and
the Director agree that, upon the occurrence of an event of default under either
the State Loan Documents or the Working Capital Loan Documents, the Director and
the Agent shall immediately consult in good faith with one another in an attempt
to agree upon a mutually acceptable course of conduct including, but not limited
to, actions to be taken with respect to the Shared Collateral. In the event that
the Director and the Agent are unable to so agree, then the Director and the
Agent may proceed to take action in accordance with the remedies available to
them in the State Loan Documents and the Working Capital Loan Documents,
respectively.
5. Consent and Waiver. Notwithstanding anything contained in the State
Loan Documents to the contrary, including without limitation Sections 4.2(c) and
4.2(f) of the Director Loan Agreement, the Director hereby (i) acknowledges and
consents to the lien on the Shared Collateral which the Companies have granted
to the Agent pursuant to the Working Capital Loan Documents and (ii) waives any
default by the Companies under the State Loan Documents arising from the grant
of such lien.
6. Insurance and Eminent Domain Proceeds. All insurance and eminent domain
proceeds, if any, with respect to the Shared Collateral shall be made payable to
the Director, but if payment shall be made to one of the parties to this
Agreement, such party will hold the proceeds in trust for the mutual benefit of
the other party pending application in accordance with this Agreement, the State
Loan Documents and the Working Capital Loan Documents. Whenever pursuant to the
State Loan Documents, the Working Capital Loan Documents or this Agreement a
procedure for the Director or the Agent to disburse such proceeds is required,
the Director and the Agent agree to cooperate with each other in good faith in
establishing a mutually acceptable procedure consistent with the provisions
thereof and hereof. The Director, and the Agent each acknowledge that under the
State Loan Documents and the Working Capital Loan Documents, respectively, they
have, under certain circumstances, the right to determine whether such proceeds
should be applied to reduce the obligations owing to them. If any such proceeds
are so applied, such proceeds will be subject to sharing in the same manner as
other proceeds of the Shared Collateral.
7. Notices. The Indenture Trustee and the Agent shall deliver to the other
(a) as soon as practicable after receipt thereof, any notice which it receives
in connection with the loan obligations owed to it by the Companies, (b) prompt
notice of any fact or occurrence, excluding lapse of time but including such
things as any purported transfer or removal from the State of Ohio of all or any
part of the Shared Collateral, which may impair the priority of the parties
shared lien or the perfection of their respective security interests in the
Shared Collateral, and (c) at least ten (10) days' prior written notice of any
action either of them proposes to undertake under the last sentence of Section 4
hereof or otherwise with respect to the Shared Collateral.
8. Method of Notification. All notices made or required to be given to any
party hereto pursuant to this Agreement shall be in writing and shall be sent to
the address appearing in the preamble to this Agreement by regular U.S. mail,
telecopier or overnight courier service. Each of the parties hereto may change
its address for service of notice by giving a notice complying with this Section
8 to the other parties hereto.
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9. Termination of Obligations. This Agreement shall automatically terminate
upon payment in full of all obligations of the Companies to either the Director
under the State Loan Documents or the Agent under the Working Capital Loan
Documents; provided, however, that if all or any part of any payment by any of
the Companies to the Director or the Agent is thereafter invalidated or set
aside or required to be repaid to any person in any bankruptcy or other
proceeding, then this Agreement shall be renewed as of such date and shall
thereafter continue in full force and effect to the extent of the obligations so
invalidated, set aside or repaid. Upon any such termination, all financing
statements and liens applicable to the satisfied obligations shall be terminated
by the appropriate party (and this obligation shall survive any termination of
this Agreement).
10. Consents Amendments and Waivers. No amendment, waiver, or consent of
any provision of this Agreement shall be effective unless in writing and signed
by the Director and the Agent. Each waiver, if any, shall be a waiver only with
respect to the specific instance involved and shall in no way impair the rights
of the waiving party or the obligations of the Borrower to any party in any
other respect at any other time.
11. Assignment and Parties in Interest. This Agreement may not be assigned
by any party without the advance written consent of the other parties hereto.
All terms of this Agreement shall be binding upon and shall inure to the benefit
of and be enforceable by the respective successors and permitted assigns of the
Director and the Agent.
12. No Third-Party Beneficiaries. This Agreement is solely for the benefit
of the Director and the Agent and is not intended to grant any rights, benefits
or defenses to or for the benefit of any other person whatsoever. The parties
agree that the Companies are signing this Agreement solely for the purpose of
consenting to and acknowledging the rights and obligations of the Director and
the Agent. The Companies shall have no rights hereunder.
13. Reservation of Security Interests as Against Third Parties. Nothing
contained herein is intended to affect or limit in any way the security
interests and/or other liens each of the parties hereto has in any and/or all of
the property and assets of the Companies, whether tangible or intangible,
insofar as the Companies and third parties are concerned. The parties hereto
specifically reserve all respective security interests and/or other liens and
rights to assert such security interests and/or other liens as against the
Companies and third parties.
14. Headings. The headings of the Sections of this Agreement are inserted
for convenience only and shall not be deemed to constitute a part hereof.
15. Applicable Law and Venue. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
16. Severability. If any provision of this Agreement, or any term,
condition, covenant, obligation or agreement contained herein is determined by a
court to be invalid or unenforceable, such determination shall not affect any
other provision, term, condition, covenant, obligation or agreement, each of
which shall be construed and enforced as if such invalid or unenforceable
portion were not contained herein. Such invalidity or enforceability shall not
affect any valid
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and enforceable application thereof, and each such provision, term, condition,
covenant, obligation or agreement, shall be deemed to be effective, operative,
made, entered into or taken in the manner and to the full extent permitted by
law.
17. Integration and Controlling Effect. This Agreement sets forth the
entire agreement between the parties hereto relating to the matters set forth
herein and supersedes all prior understandings and agreements, whether written
or oral, between the parties hereto and the Companies relating to such matters.
If any of the terms or provisions of this Agreement are determined to be in
conflict with any of the provisions of the State Loan Documents or Working
Capital Loan Documents, the terms of this Agreement shall control.
18. Interpretation. This Agreement shall be deemed to have been prepared
jointly by the parties hereto and any uncertainty or ambiguity existing herein
shall not be interpreted against any party but shall be interpreted according to
the rules for the interpretation of arm's-length agreements.
19. Covenants of the Director. All covenants, obligations and agreements of
the Director contained in this Agreement shall be effective to the extent
authorized and permitted by applicable law. No such covenant, obligation or
agreement shall be deemed to be a covenant, obligation or agreement of any
present or future Director in other than his official capacity acting pursuant
to applicable law.
20. Counterparts. This Agreement and any amendment hereto may be executed
in several counterparts and by each party on a separate counterpart, each of
which, when so executed and delivered shall be an original, but all of which
together shall constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Intercreditor
Agreement to be executed, and delivered by their respective duly authorized
officers as of the date first hereinabove written.
THE DIRECTOR OF THE DEPARTMENT OF
DEVELOPMENT OF THE STATE OF OHIO, acting
for and on behalf of the State of Ohio
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------
Name Xxxxx X. Xxxxxxx
--------------------------------
Title Chief Legal Counsel
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GENERAL ELECTRIC CAPITAL CORPORATION, as
Agent
By: /s/ illegible
------------------------------------
Its duly authorized signatory
Signature page to Ohio Director of Development Intercreditor Agreement
Each of the undersigned hereby (i) acknowledges and consents to the terms
and conditions of the foregoing Agreement, as such Agreement maybe amended,
modified, supplemented, restated or replaced from time to time, (ii) agrees to
execute and deliver such other documents and instruments in connection herewith
as may be requested by the Director or the Agent, in form and substance
satisfactory to the Director or the Agent, and (iii) agrees to take such other
action as any of the Director or the Agent may request to effectuate and carry
out the provisions of the foregoing Agreement. Each of the undersigned further
acknowledges and agrees that the provisions of the foregoing Agreement are
intended to establish and define the relative rights and obligations as among
the Director and the Agent and shall not be deemed to extend or modify the
obligations of the undersigned (or any of them) to the Director or the Agent.
By countersigning this Agreement, each of the undersigned agrees (i) to
reimburse each of the Director and the Agent, on demand, for any reasonable
expenses incurred by such person, including (1) counsel fees, (2) other charges
and (3) disbursements and compensation of agents, arising out of, in any way
connected with, or as a result of, the execution and delivery of the foregoing
Agreement or any of the Security Documents (as defined in the foregoing
Agreement) or any agreement or instrument contemplated thereby or the
performance by the parties to the foregoing Agreement or thereto of their
respective obligations under the foregoing Agreement or thereunder or in
connection with the enforcement or protection of the rights of the Director and
the Agent under the foregoing Agreement and the Security Documents and (ii) to
indemnify and hold harmless the Director and the Agent and each of their
respective directors, officers, employees and agents (each such person being
called an "Indemnitee"), on demand, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by or asserted against any Indemnitee in their respective
capacities or any of them in any way relating to or arising out of the foregoing
Agreement or the Security Documents; provided, however, that the undersigned
shall not be liable to any Indemnitee for any such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements to the extent they have resulted from the gross negligence or
willful misconduct of such Indemnitee.
REPUBLIC ENGINEERED PRODUCTS, INC.
By: /s/ Xxxxxx Xxxxxxxxx
------------------------------------
Name Xxxxxx Xxxxxxxxx
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Title Chief Financial Officer
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Signature page to Ohio Director of Development Intercreditor Agreement
PAV REPUBLIC, INC.
By: /s/ X.X. Xxxxxxx III
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Name X.X. Antonio III
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Title Vice President
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REPUBLIC N&T RAILROAD, INC.
By: /s/ Xxxxxx Xxxxxxxxx
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Name Xxxxxx Xxxxxxxxx
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Title Chief Financial Officer
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REPUBLIC MACHINE, LLC
By: /s/ Xxxxxx Xxxxxxxxx
------------------------------------
Name Xxxxxx Xxxxxxxxx
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Title Chief Financial Officer
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Signature page to Ohio Director of Development Intercreditor Agreement
EXHIBIT A
(will be identical to Exhibit A to the
existing Intercreditor Agreement)
