Exhibit 10.9
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PLEDGE AGREEMENT
BY
RENCO STEEL HOLDINGS, INC.,
as Pledgor,
TO
STATE STREET BANK AND TRUST COMPANY,
as Trustee for the holders of the
10 7/8% Senior Secured Notes due 2005
Dated as of February 3, 1998
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TABLE OF CONTENTS
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Page
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INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1. PLEDGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1. Grant of Pledge . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2. Delivery of Collateral. . . . . . . . . . . . . . . . . . . . . . 2
1.3. Secured Obligations . . . . . . . . . . . . . . . . . . . . . . . 3
1.4. No Release. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PLEDGOR . . . . . . 4
2.1. Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.2. Shares Validly Issued . . . . . . . . . . . . . . . . . . . . . . 4
2.3. Perfection upon Delivery. . . . . . . . . . . . . . . . . . . . . 4
2.4. Government Regulations. . . . . . . . . . . . . . . . . . . . . . 4
2.5. Authorization; Enforceability . . . . . . . . . . . . . . . . . . 4
2.6. No Consents, etc. . . . . . . . . . . . . . . . . . . . . . . . . 4
2.7. No Conflicts. . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.8. Pledgor's Duties. . . . . . . . . . . . . . . . . . . . . . . . . 5
2.9. Preservation of Collateral. . . . . . . . . . . . . . . . . . . . 5
2.10. Further Assurances; Supplements. . . . . . . . . . . . . . . . . 5
2.11. Trustee May Perform; Trustee Agent Appointed Attorney-in-Fact. . 6
2.12. Accuracy of Information. . . . . . . . . . . . . . . . . . . . . 6
2.13. Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 3. SPECIAL PROVISIONS CONCERNING COLLATERAL . . . . . . . . . . . . 6
3.1. Voting Rights, Dividends, Etc. Prior to Event of Default. . . . . 6
3.2. Voting Rights and Dividends After Event of Default. . . . . . . . 8
3.3. Further Assurances for Voting Rights and Dividends. . . . . . . . 8
3.4. Dividends Received in Trust . . . . . . . . . . . . . . . . . . . 9
3.5. Transfers and Other Liens; Additional Shares. . . . . . . . . . . 9
SECTION 4. REMEDIES UPON DEFAULT. . . . . . . . . . . . . . . . . . . . . .10
4.1. Event of Default. . . . . . . . . . . . . . . . . . . . . . . . .10
4.2. Dispositions of Collateral. . . . . . . . . . . . . . . . . . . .10
4.3. Securities Laws Limitations . . . . . . . . . . . . . . . . . . .10
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4.4. Additional Information. . . . . . . . . . . . . . . . . . . . . .11
4.5. Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
4.6. Deficiency. . . . . . . . . . . . . . . . . . . . . . . . . . . .11
4.7. Application of Proceeds . . . . . . . . . . . . . . . . . . . . .12
4.8. Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
4.9. No Waiver; Discontinuance of Proceeding.. . . . . . . . . . . . .12
SECTION 5. MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . .13
5.1. Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . . .13
5.2. Execution in Counterparts . . . . . . . . . . . . . . . . . . . .13
5.3. Survival. . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
5.4. Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
5.5. Severability of Provisions. . . . . . . . . . . . . . . . . . . .13
5.6. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
5.7. Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . . .13
5.8. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . .14
5.9. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. . . . . . . . . .14
5.10. Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
5.11. Reasonable Care. . . . . . . . . . . . . . . . . . . . . . . . .14
5.12. Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
5.13. Continuing Security Interest; Assignment . . . . . . . . . . . .15
5.14. Obligations Absolute . . . . . . . . . . . . . . . . . . . . . .15
5.15. Termination; Release . . . . . . . . . . . . . . . . . . . . . .16
5.16. Location of Pledged Shares . . . . . . . . . . . . . . . . . . .16
Signatures
Schedule A PLEDGED SHARES
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PLEDGE AGREEMENT
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I N T R O D U C T I O N :
PLEDGE AGREEMENT (this "Agreement"), dated as of February 3, 1998,
made by RENCO STEEL HOLDINGS, INC., a Delaware corporation ("Pledgor"), in favor
of STATE STREET BANK AND TRUST COMPANY (together with any successors or assigns,
the "Trustee"), in its capacity as trustee under the Indenture (as hereinafter
defined).
R E C I T A L S :
A. Pledgor and State Street Bank and Trust Company, as trustee, have
entered into an indenture, dated as of the date hereof (the "Indenture";
capitalized terms used herein but not otherwise defined herein have the meanings
assigned to such terms in the Indenture), pursuant to which the Company's 10
7/8% Senior Secured Notes due 2005 (the "Notes") will be issued concurrently
herewith.
B. Pledgor is the legal and beneficial owner of the Collateral (as
hereinafter defined).
C. In order to secure the performance of the Secured Obligations (as
hereinafter defined), the parties hereto are entering into this Agreement
regarding the terms and conditions of Pledgor's pledge of the Collateral to the
Trustee, for the benefit of itself and the holders of the Notes (the Trustee and
such holders, each a "Secured Party" and collectively, the "Secured Parties").
A G R E E M E N T
Pledgor and the Trustee agree as follows:
SECTION 1. PLEDGE
1.1. GRANT OF PLEDGE. In order to secure the payment and performance
when due of the Secured Obligations, Pledgor does hereby transfer, convey,
warrant, deliver, pledge, assign, hypothecate and grant to the Trustee, for its
benefit and the benefit of the holders of the Notes, and its successors and
assigns a first priority lien on, continuing security in-
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terest in and pledge of all of Pledgor's present and future right, title and
interest in, to and under the following properties, rights, interests and
privileges (collectively, the "Collateral"):
(a) the shares of capital stock of WCI Steel, Inc. ("WCI") set forth
on Schedule A hereto (collectively, the "Current Shares");
(b) all additional shares of capital stock of WCI set forth on
Schedule A hereto from time to time acquired by Pledgor in any manner
(collectively, the "Additional Shares"; together with the Current Shares,
the "Pledged Shares");
(c) any and all certificates representing the Pledged Shares and any
interest of Pledgor in any securities account pertaining to the Pledged
Shares (collectively, the "Certificates");
(d) subject to the provisions of Section 3 hereof, all dividends,
cash or proceeds, options, warrants, rights, instruments and other property
or proceeds from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of the Pledged Shares
(collectively, the "Dividends"); and
(e) all cash, instruments, securities, funds and credits of Pledgor
from time to time on deposit with the Trustee, all investments of such
funds and all certificates, securities and instruments evidencing any such
investments of such funds, and all interest, dividends, cash, instruments
and other property received as proceeds of, or in substitution or exchange
for, and all collections and claims in respect of, any and all of the
foregoing (collectively, the "Cash Collateral").
1.2. DELIVERY OF COLLATERAL. All certificates or instruments
representing or evidencing the Collateral shall be delivered to and held by or
on behalf of the Trustee pursuant hereto and shall be in suitable form for
transfer by delivery, or shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance satisfactory to the
Trustee. The Trustee shall have the right, at any time upon or after the
occurrence of an Event of Default (as hereinafter defined) and without notice to
Pledgor, to transfer to or to register in the name of the Trustee or any of its
nominees any or all of the Collateral. In addition, the Trus-
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tee shall have the right at any time to exchange certificates representing or
evidencing Collateral for certificates of smaller or larger denominations.
1.3. SECURED OBLIGATIONS. This Agreement secures, and the Collateral
is collateral security for, the payment and performance in full when due,
whether at stated maturity, by acceleration or otherwise (including, without
limitation, the payment of interest and other amounts which would accrue and
become due but for the filing of a petition in bankruptcy (whether or not a
claim is allowed against Pledgor for such interest or other amounts in any such
bankruptcy proceeding) or the operation of the automatic stay under Section
362(a) of the Bankruptcy Law), of (i) all obligations of Pledgor now existing or
hereafter arising under or in respect of the Indenture (including, without
limitation, Pledgor's obligations to pay principal, interest and all other
charges, fees, expenses, commissions, reimbursements, premiums, indemnities and
other payments related to or in respect of the obligations contained therein)
and (ii) without duplication of the amounts described in clause (i), all
obligations of Pledgor now existing or hereafter arising under or in respect of
this Agreement, including, without limitation, with respect to all charges,
fees, expenses, commissions, reimbursements, premiums, indemnities and other
payments related to or in respect of the obligations contained in this Agreement
(the obligations described in clauses (i) and (ii), collectively, the "Secured
Obligations").
1.4. NO RELEASE. Nothing set forth in this Agreement shall relieve
Pledgor from the performance of any term, covenant, condition or agreement on
Pledgor's part to be performed or observed under or in respect of any of the
Collateral or from any liability to any person under or in respect of any of the
Collateral or shall impose any obligation on the Trustee to perform or observe
any such term, covenant, condition or agreement in respect of any of the
Collateral on Pledgor's part to be so performed or observed or shall impose any
liability on the Trustee for the operation, control, care, management or repair
of the Collateral or for any act or omission on the part of Pledgor relating to
Pledgor's obligations thereto or for any breach of any representation or
warranty on the part of Pledgor contained in this Agreement, under or in respect
of the Collateral or made in connection herewith or therewith. The provisions
set forth in this Section 1.4 shall survive the termination of this Agreement
and the discharge of the Pledgor's obligations under this Agreement.
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SECTION 2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PLEDGOR
Pledgor represents, warrants and covenants (as applicable) as follows:
2.1. OWNERSHIP. Pledgor is as of the date hereof, and, as to
Collateral acquired by it from time to time after the date hereof, Pledgor will
be, the legal, record and beneficial owner of all of the Collateral free and
clear of any Lien or other right, title or interest of any person other than the
Lien and security interest granted by Pledgor to the Trustee pursuant to this
Agreement.
2.2. SHARES VALIDLY ISSUED. All of the Pledged Shares have been duly
authorized and validly issued and are fully paid and non-assessable.
2.3. PERFECTION UPON DELIVERY. Upon delivery by Pledgor to the
Trustee of the certificates evidencing the Pledged Shares, duly indorsed to the
Trustee or in blank, the Lien on such Collateral granted to the Trustee pursuant
to this Agreement constitutes and assuming continued possession by the Trustee
thereof hereafter will constitute a first priority perfected Lien on such
Collateral, superior and prior to the rights of all other persons therein and
subject to no other Liens.
2.4. GOVERNMENT REGULATIONS. The pledge of the Collateral pursuant
to this Agreement does not violate Regulation G, T, U or X of the Federal
Reserve Board.
2.5. AUTHORIZATION; ENFORCEABILITY. Pledgor has full corporate
power, authority and legal right to pledge and grant a security interest in all
the Collateral pursuant to this Agreement. This Agreement constitutes the
legal, valid and binding obligation of Pledgor, enforceable against Pledgor in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium and similar laws affecting
creditors' rights generally and to general equitable principles.
2.6. NO CONSENTS, ETC. No authorization, consent, approval, license,
qualification or formal exemption from, or any filing, declaration or
registration with, any court, governmental agency or regulatory authority, or
with any securities exchange or any other person, is required in connection with
(i) the execution, delivery or performance by Pledgor of
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this Agreement, (ii) the grant of a Lien on (including the priority thereof) the
Collateral by Pledgor in the manner and for the purpose contemplated by this
Agreement or (iii) the exercise of the rights and remedies of the Trustee
created hereby, except (a) those that have been obtained or made concurrently
with the execution hereof, and (b) as may be required in connection with such
disposition by laws affecting the offering and sale of securities generally.
2.7. NO CONFLICTS. The execution, delivery and performance by
Pledgor of this Agreement do not (or with notice or lapse of time or both, will
not) violate, conflict with or constitute a default under, or result in the
termination of or accelerate the performance required by, or result in there
being declared void, voidable or without further binding effect, any provision
of any other agreement, instrument or document to which Pledgor is a party.
2.8. PLEDGOR'S DUTIES. Pledgor shall perform, abide by and be
governed by each and all of the terms, provisions, covenants and agreements set
forth in this Agreement and in each and every supplement hereto or amendment
hereof which may at any time or from time to time be executed and delivered by
the parties hereto or their successors and assigns.
2.9. PRESERVATION OF COLLATERAL. All rights, powers and privileges
of the Trustee herein set forth are coupled with an interest and are
irrevocable, subject to the terms and conditions hereof, and Pledgor shall not
take or omit to take any action with respect to the Collateral or otherwise
which is inconsistent with this Agreement, and any such action inconsistent
herewith or therewith shall be void. Pledgor shall not further pledge,
encumber, hypothecate, sell, convey or assign, or grant any option with respect
to all or any part of the Collateral or suffer any of the foregoing to occur by
operation of law or otherwise, except for the Liens and security interests
granted by Pledgor to the Trustee pursuant to this Agreement, and shall promptly
take such action as is reasonably necessary to remove any such other Lien.
Pledgor will, at its expense, warrant and defend the title to the Collateral
against all claims and demands of all third persons or persons claiming by,
through or under Pledgor at any time claiming any interest therein adverse to
the Trustee.
2.10. FURTHER ASSURANCES; SUPPLEMENTS. Pledgor agrees that at any
time and from time to time, Pledgor will, at its expense, promptly do, execute,
acknowledge and deliver all and every further act, deed, conveyance, transfer,
waiver, sub-
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ordination, supplement and other instruments, documents and assurances that may
be reasonably necessary or that the Trustee deems appropriate or advisable,
including, without limitation, supplemental or additional UCC-1 financing
statements, for the continued perfection, preservation and protection of the
security interest in the Collateral granted hereby or to enable the Trustee to
exercise and enforce its rights and remedies hereunder with respect to any
Collateral.
2.11. TRUSTEE MAY PERFORM; TRUSTEE APPOINTED ATTORNEY-IN-FACT. If
Pledgor fails to perform any agreement contained in this Agreement, the Trustee
may itself perform, or cause performance of, such agreement, and the expenses of
the Trustee, including, without limitation, the reasonable fees and expenses of
its counsel and the allocated cost of staff counsel, incurred in connection
therewith shall be payable by Pledgor on demand. Pledgor hereby appoints the
Trustee its attorney-in-fact, with full authority in the place and stead of
Pledgor and in the name of Pledgor, or otherwise, from time to time in the
Trustee's discretion to take any action which the Trustee may take pursuant to
the provisions of this Section.
2.12. ACCURACY OF INFORMATION. All information set forth herein
(including the exhibits hereto) relating to the Collateral is accurate and
complete in all material respects.
2.13. INDEMNIFICATION. Pledgor hereby agrees to indemnify the
Trustee for any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind and
nature whatsoever which may be imposed on, incurred by or asserted against the
Trustee in any way relating to or arising out of this Agreement or the pledge
and security interest contemplated hereby or the enforcement of any of the terms
hereof or otherwise arising or relating in any manner to the Lien contemplated
hereunder; provided, however, that Pledgor shall not be liable for any of the
foregoing to the extent they arise from the gross negligence or willful
misconduct of the Trustee.
SECTION 3. SPECIAL PROVISIONS CONCERNING COLLATERAL
3.1. VOTING RIGHTS, DIVIDENDS, ETC. PRIOR TO EVENT OF DEFAULT. As
long as no Event of Default shall have occurred and be continuing:
(a) Pledgor shall be entitled to exercise any and all voting and
other consensual rights pertaining to the
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Collateral or any part thereof for any purpose not inconsistent with the
terms of this Agreement or the Indenture; provided, however, that Pledgor
shall give the Trustee at least five days' prior written notice of the
manner in which it intends to exercise any such right. It is understood,
however, that neither (i) the voting by Pledgor of any Pledged Shares for
or Pledgor's consent to the election of directors at a regularly scheduled
annual or other meeting of stockholders or with respect to incidental
matters at any such meeting nor (ii) Pledgor's consent to or approval of
any action otherwise permitted under this Agreement and the Indenture,
shall be deemed inconsistent with the terms of this Agreement or the
Indenture within the meaning of this Section 3.1, and no notice of any such
voting or consent need be given to the Trustee.
(b) Pledgor shall be entitled to receive and retain, and to utilize
free and clear of the Lien of this Agreement, any and all dividends and
distributions in respect of the Collateral; provided, however, that any and
all Extraordinary Distributions shall be, and shall be delivered forthwith
to the Trustee to hold as, Collateral and shall, if received by Pledgor, be
received in trust for the benefit of the Trustee, be segregated from the
other property or funds of Pledgor, and be delivered forthwith to the
Trustee as Collateral in the same form as so received (with any necessary
endorsement or other instruments required by Section 1.2 of this
Agreement).
(c) In order to permit Pledgor to exercise the voting and other
rights which it is entitled to exercise pursuant to Section 3.1(a) above
and to receive the dividends and distributions which it is authorized to
receive and retain pursuant to Section 3.1(b) above, the Trustee shall, if
necessary, upon written request of Pledgor, from time to time execute and
deliver (or cause to be executed and delivered) to Pledgor all such
proxies, dividend payment orders and other instruments as Pledgor may
reasonably request.
(d) For purposes of Section 3.1(b) above, "Extraordinary
Distribution" shall mean any and all dividends, cash, instruments and other
property and proceeds received, receivable or otherwise distributed on the
Pledged Shares constituting (i) any liquidating dividend or other
liquidating distribution or other similar extraordinary dividend or
distribution; (ii) any dividend or other distribution in respect of the
Pledged Shares in the
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form of Capital Stock or any other property or assets (including cash and
Cash Equivalents) to the extent the Fair Market Value (determined at the
time of the dividend or distribution) of all dividends and other
distributions in respect of the Pledged Shares made on or after the Issue
Date to and including the date of such dividend or other distribution
exceeds 100% of the Consolidated Net Income of WCI accrued on a cumulative
basis subsequent to January 31, 1998.
"Fair Market Value" means, with respect to any asset, the price which could
be negotiated in an arm's-length free market transaction, for cash, between
a willing seller and a willing buyer, neither of whom is under undue
pressure or compulsion to complete the transaction. Fair Market Value of
any asset of the Company and its Subsidiaries shall be determined by the
Board of Directors of the Company acting in good faith and shall be
evidenced by a Board Resolution thereof delivered to the Trustee; provided
that with respect to any Asset Sale which involves in excess of $5.0
million, the Fair Market Value of any such asset or assets shall be
determined by an Independent Financial Advisor.
3.2. VOTING RIGHTS AND DIVIDENDS AFTER EVENT OF DEFAULT. Upon the
occurrence and during the continuance of an Event of Default:
(a) Upon written notice from the Trustee to Pledgor, all rights of
Pledgor to exercise the voting and other consensual rights which it would
otherwise be entitled to exercise pursuant to Section 3.1 above shall
cease, and all such rights shall thereupon become vested in the Trustee,
which shall thereupon have the sole right to exercise such voting and other
consensual rights during the continuance of such Event of Default.
(b) Upon written notice from the Trustee to Pledgor, all rights of
Pledgor to receive the dividends and distributions which it would otherwise
be authorized to receive and retain pursuant to Section 3.1 above shall
cease and all such rights shall thereupon become vested in the Trustee,
which shall thereupon have the sole right to receive and hold as Collateral
such dividends and distributions during the continuance of such Event of
Default.
3.3. FURTHER ASSURANCES FOR VOTING RIGHTS AND DIVIDENDS. In order to
permit the Trustee to receive all dividends
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and other distributions to which it may be entitled under Section 3.1(b) above,
to exercise the voting and other consensual rights which it may be entitled to
exercise pursuant to Section 3.2(a) above, and to receive all dividends and
distributions which it may be entitled to receive under Section 3.2(b) above,
Pledgor shall, if necessary, upon written notice from the Trustee, from time to
time execute and deliver to the Trustee appropriate proxies, dividend payment
orders and other instruments as the Trustee may reasonably request.
3.4. DIVIDENDS RECEIVED IN TRUST. All Dividends and distributions
which are received by Pledgor contrary to the provisions of Section 3.2 above
shall be received in trust for the benefit of the Trustee, shall be segregated
from other funds of Pledgor and shall be forthwith paid over to the Trustee as
Collateral in the same form as so received (with any necessary endorsement).
3.5. Transfers and Other Liens; Additional Shares.
(a) Transfers and Other Liens. Pledgor shall not (i) pledge,
encumber, hypothecate, sell, convey, assign or otherwise dispose of, or
grant any option or warrant with respect to, any of the Collateral or
suffer any of the foregoing to occur by operation of law or otherwise
except for the Liens and security interests granted by Pledgor to the
Trustee pursuant to this Agreement or (ii) permit WCI to merge or
consolidate unless all the outstanding capital stock of the surviving or
resulting corporation is, upon such merger or consolidation, pledged
hereunder and no cash, securities or other property is distributed in
respect of the outstanding shares of any other constituent corporation;
provided, however, that in the event of an Asset Sale of all of the
Collateral, pursuant to, and in compliance with, the provisions of the
Indenture, the Trustee shall release the Collateral that is the subject of
such sale to Pledgor free and clear of the Lien and security interest under
this Agreement upon the making of proper arrangements by the Trustee for
the application of the proceeds of such Asset Sale in accordance with the
provisions of the Indenture.
(b) Additional Shares. Pledgor agrees that it will cause each issuer
of Collateral consisting of capital stock not to issue any stock or other
securities in addition to or in substitution for such Collateral issued by
such issuer, except to Pledgor.
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SECTION 4. REMEDIES UPON DEFAULT
4.1. EVENT OF DEFAULT. It shall be an Event of Default hereunder if
there shall occur an Event of Default under the Indenture.
4.2. DISPOSITIONS OF COLLATERAL. If any Event of Default shall have
occurred and be continuing, the Trustee may exercise in respect of the
Collateral, in addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured party on
default under the Uniform Commercial Code in effect in the State of New York at
that time, and may also in its sole discretion, without notice except as
specified below, subject to applicable law, at any time or from time to time,
sell, assign and deliver, or grant options to purchase, all or any part of the
Collateral, or any interest therein, at any public or private sale, at any
exchange or broker's board for cash, for immediate or future delivery without
any assumption of credit risk, and for such price or prices and on such terms as
may be reasonable; provided that at least 10 days' notice of the time and place
of any such sale shall be given to Pledgor. At any such sale, unless prohibited
by applicable law, the Trustee on behalf of the Secured Parties may bid for and
purchase all or any part of the Collateral so sold free from any right or equity
of redemption of Pledgor. Neither the Trustee nor any Secured Party shall be
liable for failure to collect or realize upon any or all of the Collateral or
for any delay in so doing nor shall any of them be under any obligation to take
any action whatsoever with regard thereto.
4.3. SECURITIES LAWS LIMITATIONS. Pledgor recognizes that, by reason
of certain prohibitions contained in the Securities Act of 1933, as amended (the
"Securities Act"), and applicable state securities laws, the Trustee may be
compelled, with respect to any sale of all or any part of the Collateral, to
limit purchasers to those who will agree, among other things, to acquire the
Collateral for their own account, for investment and not with a view to the
distribution or resale thereof. Pledgor acknowledges that any such private
sales may be at prices and on terms less favorable to the Trustee than those
obtainable through a public sale without such restrictions (including, without
limitation, a public offering made pursuant to a registration statement under
the Securities Act), and, notwithstanding such circumstances, agrees that any
such private sale shall be deemed to have been made in a commercially reasonable
manner and that the Trustee shall have no obligation to engage in public sales
and no obligation to delay
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the sale of any Collateral for the period of time necessary to permit the issuer
thereof to register it for a form of public sale requiring registration under
the Securities Act or under applicable state securities laws, even if Pledgor
would agree to do so.
4.4. ADDITIONAL INFORMATION. If the Trustee determines to exercise
its right to sell any or all of the Collateral, upon written request, Pledgor
shall, and shall cause each issuer of any Collateral to be sold hereunder from
time to time to, furnish to the Trustee all such information as the Trustee may
request in order to determine the number of shares and other instruments
included in the Collateral which may be sold by the Trustee as exempt
transactions under the Securities Act and the rules of the Securities and
Exchange Commission thereunder, as the same are from time to time in effect.
4.5. WAIVERS. Pledgor hereby waives, to the extent permitted by
applicable law, notice or judicial hearing in connection with the Trustee's
taking possession or the Trustee's disposition of any Collateral, including,
without limitation, any and all prior notice and hearing for any prejudgment
remedy or remedies and any such right which Pledgor would otherwise have under
law, and Pledgor hereby further waives: (a) all damages occasioned by such
taking of possession; (b) all other requirements as to the time, place and terms
of sale or other requirements with respect to the enforcement of the Trustee's
rights hereunder; and (c) all rights of redemption, appraisal, valuation, stay,
extension or moratorium now or hereafter in force under any applicable law.
Any sale of, or the grant of options to purchase, or any other realization upon,
any Collateral shall operate to divest all right, title, interest, claim and
demand, either at law or in equity, of Pledgor therein and thereto, and shall be
a perpetual bar both at law and in equity against Pledgor and against any and
all persons claiming or attempting to claim the Collateral so sold, optioned or
realized upon, or any part thereof, from, through and under Pledgor.
4.6. DEFICIENCY. Notwithstanding any other provision of this
Agreement to the contrary, if, after giving effect to any sale, transfer or
other disposition of any or all of the Collateral pursuant hereto and after the
application of the proceeds hereunder and any Collateral sold, transferred or
otherwise disposed of, any Secured Obligations remain unpaid or unsatisfied,
Pledgor shall remain liable for the unpaid and unsatisfied amount of such
Secured Obligations.
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4.7. APPLICATION OF PROCEEDS. The proceeds of any sale made under or
by virtue of the provisions of Section 4.16 of the Indenture, together with any
other sums then held by the Trustee pursuant to this Agreement, shall be applied
promptly from time to time by the Trustee as set forth in the Indenture.
4.8. EXPENSES. Pledgor will upon demand pay to the Trustee the
amount of any and all reasonable expenses, including the reasonable fees and
expenses of its counsel and the allocated fees and expenses of staff counsel and
the reasonable fees and expenses of any experts and agents, which the Trustee
may incur in connection with (i) the administration of this Agreement, (ii) the
custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Collateral, (iii) the exercise or enforcement of
any of the rights of the Trustee hereunder or (iv) the failure by Pledgor to
perform or observe any of the provisions hereof. All amounts payable by Pledgor
under this Section 4.8 shall be due upon demand and shall be part of the Secured
Obligations. Pledgor's obligations under this Section shall survive the
termination of this Agreement and the discharge of Pledgor's other obligations
hereunder.
4.9. NO WAIVER; DISCONTINUANCE OF PROCEEDING.
(a) No failure on the part of the Trustee to exercise, and no course
of dealing with respect to, and no delay in exercising, any right, power
or remedy hereunder shall operate as a waiver thereof; nor shall any single
or partial exercise by the Trustee of any right, power or remedy hereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy. The remedies herein provided are to the fullest
extent permitted by law cumulative and are not exclusive of any remedies
provided by law.
(b) In the event the Trustee shall have instituted any proceeding to
enforce any right, power or remedy under this instrument by foreclosure,
sale, entry or otherwise, and such proceeding shall have been discontinued
or abandoned for any reason or shall have been determined adversely to the
Trustee, then and in every such case Pledgor, the Trustee and each Secured
Party shall be restored to their respective former positions and rights
hereunder with respect to the Collateral, and all rights, remedies and
powers of the Trustee shall continue as if no such proceeding had been
instituted.
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SECTION 5. MISCELLANEOUS PROVISIONS
5.1. ENTIRE AGREEMENT. This Agreement and the documents and
agreements referred to herein embody the entire agreement and understanding
between the parties hereto and supersede all prior agreements and understandings
relating to the subject matter hereof.
5.2. EXECUTION IN COUNTERPARTS. This Agreement and any amendments,
waivers, consents or supplements hereto may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed to be an original, but all
such counterparts shall constitute one and the same Agreement.
5.3. SURVIVAL. All representations, warranties, covenants and
agreements herein contained on the part of Pledgor shall survive the payment and
performance of all the Secured Obligations and the termination of this
Agreement.
5.4. HEADINGS. The Section headings used in this Agreement are for
convenience of reference only and shall not affect the construction of this
Agreement.
5.5. SEVERABILITY OF PROVISIONS. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
5.6. NOTICES. All notices or other communications required to be
given hereunder shall be given at the address and in the manner required in the
Indenture.
5.7. AMENDMENTS. No amendment, modification, supplement, termination
or waiver of or to any provision of this Agreement, or consent to any departure
by Pledgor therefrom, shall be effective unless in writing and signed by the
Trustee and Pledgor. Any amendment, modification or supplement of or to any
provision of this Agreement, any waiver of any provision of this Agreement and
any consent to any departure by Pledgor from the terms of any provision of this
Agreement shall be effective only in the specific instance and for the specific
purpose for which made or given.
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5.8. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING
EFFECT TO NEW YORK'S PRINCIPLES OF CONFLICTS OF LAWS).
5.9. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. ALL JUDICIAL
PROCEEDINGS BROUGHT AGAINST PLEDGOR WITH RESPECT TO THIS AGREEMENT MAY BE
BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF
NEW YORK AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, PLEDGOR ACCEPTS FOR
ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE
NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS, AND IRREVOCABLY AGREES TO BE
BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT SUBJECT
TO RIGHT OF APPEAL. PLEDGOR HEREBY IRREVOCABLY WAIVES TRIAL BY JURY AND PLEDGOR
HEREBY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING WITHOUT LIMITATION, ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH
ACTION OR PROCEEDING IN SUCH JURISDICTION. NOTHING HEREIN SHALL AFFECT THE
RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE
RIGHT OF THE TRUSTEE TO BRING PROCEEDINGS AGAINST PLEDGOR IN THE COURTS OF ANY
OTHER JURISDICTION.
5.10. AGENTS. The Trustee may use one or more agents to perform its
obligations hereunder.
5.11. REASONABLE CARE. The Trustee shall be deemed to have exercised
reasonable care in the custody and preservation of Collateral in its possession
if such Collateral is accorded treatment substantially equivalent to that which
the Trustee, in its individual capacity, accords its own property, it being
understood that the Trustee shall not have responsibility for taking any
necessary steps to preserve rights against any person with respect to any
Collateral.
5.12. TRUSTEE. The Trustee has been appointed as trustee pursuant to
the Indenture. The actions of the Trustee hereunder are subject to the
provisions of the Indenture. The Trustee may resign and a successor Trustee may
be appointed in the manner provided in the Indenture. Upon the acceptance of
any appointment as the Trustee by a successor Trustee, that successor Trustee
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Trustee under this Agreement, and the
retiring Trustee shall thereupon be discharged from its duties and obligations
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under this Agreement. After any retiring Trustee's resignation, the provisions
of this Agreement shall inure to its benefit as to any actions taken or omitted
to be taken by it under this Agreement while it was the Trustee.
5.13. CONTINUING SECURITY INTEREST; ASSIGNMENT. This Agreement shall
create a continuing security interest in the Collateral and shall (i) be binding
upon Pledgor and its successors and assigns and (ii) inure, together with the
rights and remedies of the Trustee hereunder, to the benefit of the Trustee and
each Secured Party and each of their successors, transferees and assigns. No
other person (including, without limitation, any other creditor of Pledgor)
shall have any interest herein or any right or benefit with respect hereto.
Pledgor may not assign its rights under this Agreement without the prior written
consent of the Trustee.
5.14. OBLIGATIONS ABSOLUTE. All obligations of Pledgor hereunder
shall be absolute and unconditional irrespective of:
(i) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of Pledgor;
(ii) any lack of validity or enforceability of any loan document, or
any other agreement or instrument relating thereto;
(iii) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Secured Obligations, or any other
amendment or waiver of or any consent to any departure from the Indenture,
or any other agreement or instrument relating thereto;
(iv) any exchange or non-perfection of the Pledged Collateral, or any
release or amendment or waiver of or consent to any departure from any
guarantee, for all or any of the Secured Obligations;
(v) any exercise or non-exercise or any waiver of any right, remedy,
power or privilege under or in respect of any document relating to the
Indenture; or
(vi) any other circumstances which might otherwise constitute a
defense available to, or a discharge of, Pledgor.
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5.15. TERMINATION; RELEASE. When all of the Secured Obligations have
been paid in full or the Collateral has been sold pursuant to an Asset Sale
described in, and complying with, Section 4.16 of the Indenture, this Agreement
shall terminate. Upon termination of this Agreement or any release of
Collateral in accordance with the provisions of the Indenture, the Trustee
shall, upon the request and at the sole cost and the expense of Pledgor,
forthwith assign, transfer and deliver to Pledgor against receipt and without
express or implied recourse to or warranty by the Trustee, such of the
Collateral to be released as may be in possession of the Trustee and as shall
not have been sold or otherwise applied pursuant to the terms hereof, and proper
instruments acknowledging the termination of this Agreement or the release of
such Collateral, as the case may be.
5.16. LOCATION OF PLEDGED SHARES. The Trustee will take all
reasonable steps to ensure that the Pledged Shares are at all times located
within the State of New York.
IN WITNESS WHEREOF, Pledgor and the Trustee have executed this
Agreement as of the day and year first above written.
RENCO STEEL HOLDINGS, INC.
By: /s/ Xxxxx X. Xxx
-----------------------------
Name: Xxxxx X. Xxx
Title: Vice President and Chief
Financial Officer
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
SCHEDULE A
PLEDGED SHARES
--------------
Percentage
of All Capital
or Other Equity
Class of Certificate Number of Interests of
Issuer Stock Par Value Numbers Shares Issuer
------ -------- --------- ----------- --------- ---------------
WCI Steel, Inc. Common No par value WCU 0382 100 100%
Stock
