EXHIBIT 4.13
FORM OF
INTERCREDITOR AGREEMENT
THIS INTERCREDITOR AGREEMENT (the "Agreement"), dated as of the ____
day of __________, 2002, is made by X.X. XXXXXX TRUST COMPANY, NATIONAL
ASSOCIATION, as Collateral Agent for the holders of the Notes and the Bonds
(each as defined below), with an office at ________________________________,
Pittsburgh, Pennsylvania _____, X.X. XXXXXX TRUST COMPANY, NATIONAL ASSOCIATION,
as indenture trustee for the holders of the Notes, with an office at
________________________________, Pittsburgh, Pennsylvania _____, X.X. XXXXXX
TRUST COMPANY, NATIONAL ASSOCIATION, as indenture trustee for the holders of the
Bonds, with an office at ________________________________, Pittsburgh,
Pennsylvania _____, and FLEET CAPITAL CORPORATION, as Agent for the holders of
Agent's Debt (as defined below), with an office at Xxx Xxxxx Xxxxxx Xxxxx, Xxxxx
0000, Xxxxxxx, Xxxxxxxx 00000.
1. Background.
(a) Weirton Steel Corporation, a Delaware corporation ("Company"), has
granted to the Notes Trustee and the Bonds Issuer (as each is defined below,
respectively) liens upon, and security interests in, the Collateral (as defined
below) to secure the Notes Debt and the Bonds Debt (as each is defined below,
respectively). The rights of the Bonds Issuer in and to the Collateral have been
assigned to the Bonds Trustee pursuant to the terms of (i) a certain Assignment
Agreement (as defined below) and (ii) the Bonds Indenture (as defined below).
(b) Pursuant to the terms of the Junior Intercreditor Agreement (as
defined below), each of the Notes Trustee and the Bonds Trustee has appointed
Collateral Agent as its agent, among other things, to execute this Agreement and
act for it in certain respects in respect of the Collateral. Pursuant to the
Junior Intercreditor Agreement, each of the Notes Trustee and the Bonds Trustee
has also reserved to itself certain rights with respect to the Collateral.
(c) Company has granted to Agent liens upon, and security interests in,
the Collateral to secure Agent's Debt.
(d) Agent and each Lien Holder (as defined below) desire to agree
between themselves on their relative rights, priorities and interests in the
Collateral and certain other matters as set forth herein.
Therefore, in consideration of the foregoing and the mutual covenants
set forth below, the parties hereby agree as follows.
2. Definitions. For purposes of this Agreement:
(a) "Agent" means Fleet Capital Corporation, in its capacity as Agent
for the holders of Agent's Debt, and each successor agent with respect thereto.
(b) "Agent's Debt" means all obligations, liabilities and indebtedness
from time to time owing by Company to Agent and the lenders under the Agent's
Loan Agreement, including without limitation principal and interest (including
without limitation any interest accruing after the commencement of insolvency
proceedings with respect to Company, whether or not such interest is allowed as
a claim in such proceedings), fees and premiums from time to time owing by
Company to Agent and the lenders under the Agent's Loan Agreement (including
reasonable attorneys' fees), and all other amounts owing under Agent's
Documents; provided, that (i) at all times that any Notes Debt is outstanding,
the maximum outstanding principal amount of Agent's Debt that is secured by the
Collateral shall not on the date incurred exceed the amount permitted to be
incurred and secured by the Collateral pursuant to the Notes Indenture, and (ii)
such maximum outstanding principal amount permitted hereunder shall be reduced
from time to time as set forth in Section 3(d) hereof.
(c) "Agent's Documents" means any and all agreements, instruments and
documents, together with any amendments, renewals, extensions or supplements
thereto or replacements thereof, now or hereafter evidencing or securing the
financing arrangements provided for under the Agent's Loan Agreement, including
without limitation the Agent's Loan Agreement.
(d) "Agent's Loan Agreement" means that certain Amended and Restated
Loan and Security Agreement dated as of ___________, 2002, as the same may be
amended, supplemented or otherwise modified from time to time, among Company,
Agent, the other agents party thereto and the lenders from time to time party
thereto.
(e) "Approved Financing Transaction" means a financing secured by the
Tandem Mill Collateral (i) that is permitted to be consummated pursuant to
Sections 3.9 and 3.13 of the Notes Indenture or, at any time that all Notes Debt
has been paid in full, but any Bonds Debt is outstanding, that is permitted to
be consummated pursuant to Sections 5.5 and 5.6 of the Bonds Loan Agreement,
(ii) the maximum principal amount of which financing that is secured by the
Tandem Mill Collateral does not exceed $90,000,000, (iii) that is consummated in
order to provide financing for a Permitted Acquisition, and (iv) to which Agent
has consented to the extent such consent is required under the terms of the
Agent's Loan Agreement.
(f) "Approved Sale" means an Asset Disposition relating to all or any
portion of the Collateral with respect to which either (i) if such Asset
Disposition occurs at a time when any of the Notes Debt is outstanding, (A)
Company or one of its Subsidiaries (as
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the case may be) receives consideration at the time of such Asset Disposition at
least equal to the fair market value thereof, as determined in good faith by
Company's board of directors and evidenced by a resolution of such board of
directors, (B) not less than 75% of the consideration received by Company (or
such Subsidiary, as the case may be) is in the form of cash or Cash Equivalents
(as defined in the Notes Indenture), (C) Company (or such Subsidiary, as the
case may be) has complied with Article 10 of the Notes Indenture with respect
thereto and (D) Agent has consented, to the extent such consent is required
under the terms of the Agent's Loan Agreement or (ii) if such Asset Disposition
occurs at a time that the Notes Debt has been paid in full, but any Bonds Debt
is outstanding, (A) Company or one of its Subsidiaries (as the case may be)
receives consideration at the time of such Asset Disposition at least equal to
the fair market value thereof, as determined in good faith by Company's board of
directors and evidenced by a resolution of such board of directors, (B) not less
than 75% of the consideration received by Company (or such Subsidiary, as the
case may be) is in the form of cash or Cash Equivalents (as defined in the Bonds
Loan Agreement), (C) Company (or such Subsidiary, as the case may be) has
complied with Section 9.3 of the Bonds Loan Agreement with respect thereto and
(D) Agent has consented, to the extent such consent is required under the terms
of the Agent's Loan Agreement.
(g) "Approved Sale and Leaseback" means a sale and leaseback
transaction with respect to all or a portion of the Collateral, with respect to
which either (i) if such sale and leaseback transaction occurs at a time when
any of the Notes Debt is outstanding, (A) the net proceeds of such sale or
transfer are at least equal to the fair market value (as determined by Company's
board of directors) of the subject portion of the Collateral, (B) Company would
be entitled pursuant to the terms of Section 3.9 and 3.13 of the Notes Indenture
to issue, assume or guarantee indebtedness secured by a mortgage on such portion
of the Collateral, (C) Company has complied with Article 10 of the Notes
Indenture and (D) Agent has consented, to the extent such consent is required
under the terms of the Agent's Loan Agreement or (ii) if such sale and leaseback
transaction occurs at a time when the Notes Debt has been paid in full, but any
Bonds Debt is outstanding, (A) the net proceeds of such sale or transfer are at
least equal to the fair market value (as determined by Company's board of
directors) of the subject portion of the Collateral, (B) Company would be
permitted to consummate such transaction pursuant to Sections 5.5 and 5.6 of the
Bonds Loan Agreement and (C) Agent has consented, to the extent such consent is
required under the terms of the Agent's Loan Agreement.
(h) "Asset Disposition" has the meaning provided to such term in the
Notes Indenture, whether or not any of the Notes Debt is outstanding or the
Notes Indenture remains effective.
(i) "Assignment Agreement" means the certain Assignment and Transfer of
Deeds of Trust and Security Agreement dated as of __________, 2002 between the
Bonds Issuer and the Bonds Trustee.
(j) "Bonds" means those certain Secured Pollution Control Revenue
Refunding Bonds (Weirton Steel Corporation Project) Series 2002 in the original
aggregate
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principal amount of $__________ issued by the Bonds Issuer pursuant to the
Bonds Indenture.
(k) "Bonds Debt" means all obligations, liabilities and indebtedness
owing by Company to the Bonds Issuer, the Bonds Trustee and/or the holders of
the Bonds, in each case, including without limitation principal and interest
(including without limitation any interest accruing after the commencement of
insolvency proceedings with respect to Company, whether or not such interest is
allowed as a claim in such proceedings), fees and premiums owing by Company to
the Bonds Trustee and/or the holders of the Bonds (including reasonable
attorneys' fees), and all other amounts owing to the Bonds Trustee, the holders
of the Bonds and/or the Bonds Issuer under Collateral Agent's Documents.
(l) "Bonds Indenture" means that certain Indenture of Trust dated as of
__________, 2002 between the Bonds Issuer and the Bonds Trustee, as in effect on
the date hereof and as amended, supplemented or otherwise modified in a manner
permitted by the Agent's Loan Agreement.
(m) "Bonds Issuer" means the City of Weirton, West Virginia.
(n) "Bonds Loan Agreement" means that certain Agreement dated as of
___________, 2002 between Company and the Bonds Issuer, as assigned to the Bonds
Trustee pursuant to the Bonds Indenture, as in effect on the date hereof and as
amended, supplemented or otherwise modified in a manner permitted by the Agent's
Loan Agreement.
(o) "Bonds Trustee" means X.X. Xxxxxx Trust Company, National
Association, in its capacity as indenture trustee under the Bonds Indenture, and
each successor indenture trustee thereunder.
(p) "Collateral" means, collectively, (i) the Tandem Mill Collateral,
(ii) the Tin Mill Collateral, (iii) the Hot Mill Collateral, (iv) all
replacement assets or properties purchased by Company or any Subsidiary with the
proceeds of an Approved Sale or an Approved Sale and Leaseback (other than an
Approved Sale and Leaseback relating to the Tandem Mill Collateral), (v) all
Permitted Acquisition Assets, (vi) each Pledged Account, (vii) all other fixed
assets of Company or any Subsidiary on which Agent and any or all of the Lien
Holders is or are at any time granted a lien to secure all or a portion of
Agent's Debt and all or a portion of Collateral Agent's Debt, respectively,
(viii) all accessories, additions, attachments, improvements, substitutions and
replacements thereto and therefor, together with all books, records, writings,
data bases information and other similar property relating to, used or useful in
connection with, or evidencing, embodying, incorporating or referring to any of
the foregoing, (ix) all proceeds, products, rents, profits and returns of and
from all or any part of the foregoing and (x) any and all after-acquired right,
title and interest of Company in any of the foregoing. Notwithstanding the
foregoing, in no event shall the Collateral include any of the Project Assets or
any property arising from, or as a result of the disposition of, any of the
Project Assets.
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(q) "Collateral Agent" means X.X. Xxxxxx Trust Company, National
Association, in its capacity as collateral agent under the Junior Intercreditor
Agreement, and each successor collateral agent thereunder.
(r) "Collateral Agent's Debt" means collectively, the Notes Debt and
the Bonds Debt.
(s) "Collateral Agent's Documents" means any and all agreements,
instruments and documents now or hereafter evidencing or securing the financing
arrangements provided for under the Notes Indenture or the Bonds Loan Agreement,
including the Bonds, the Bonds Indenture, the Bonds Loan Agreement, the Notes,
the Notes Indenture, the Junior Intercreditor Agreement and the Security
Documents, all as in effect on the date hereof and as amended, supplemented or
otherwise modified in a manner permitted by the Agent's Loan Agreement.
(t) "Excepted Sale" means a sale, lease, conveyance or other
disposition of Collateral that is excepted from the definition of the term
"Asset Disposition" contained in the Notes Indenture (whether or not any of the
Notes Debt is outstanding or the Notes Indenture remains effective) and to which
Agent has consented, to the extent such consent is required under the terms of
the Agent's Loan Agreement.
(u) "Hot Mill Collateral" means the real property constituting
Company's Hot Strip Mill located at Company's Weirton, West Virginia
steel-making facility, which converts slabs into flat rolled coils and which is
legally described on Exhibit A-4 attached to the Agent's Loan Agreement, as in
effect on the date hereof, together with all equipment and fixtures now or
hereafter located thereon (whether or not later moved), including without
limitation the equipment listed on Exhibit A-5 attached to the Agent's Loan
Agreement, as in effect on the date hereof and all property of the types
described in clauses (viii), (ix) and (x) of the definition of the term
"Collateral" and related to any of the foregoing.
(v) "Junior Intercreditor Agreement" means the Collateral Agency and
Second Lien Intercreditor Agreement of even date herewith among the Notes
Trustee, the Bonds Trustee and Collateral Agent, as in effect on the date
hereof, and as amended, supplemented or otherwise modified in a manner permitted
by the Agent's Loan Agreement.
(w) "Lien Holder" means each of Collateral Agent, the Notes Trustee and
the Bonds Trustee.
(x) "Net Cash Proceeds" has the meaning provided to such term in the
Notes Indenture, whether or not any of the Notes Debt is outstanding or the
Notes Indenture remains effective.
(y) "Notes" means those certain 10% Senior Secured Notes due 2008 in
the original aggregate principal amount of $__________, issued by Company
pursuant to the Notes Indenture.
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(z) "Notes Debt" means all obligations, liabilities and indebtedness
owing by Company to the Notes Trustee and/or the holders of the Notes, including
without limitation principal and interest (including without limitation any
interest accruing after the commencement of insolvency proceedings with respect
to Company, whether or not such interest is allowed as a claim in such
proceedings), fees and premiums owing by Company to the Notes Trustee and/or the
holders of the Notes (including reasonable attorneys' fees), and all other
amounts owing to the Notes Trustee and/or the holders of the Notes under
Collateral Agent's Documents.
(aa) "Notes Indenture" means that certain Indenture dated as of
__________, 2002 between Company and the Notes Trustee, as in effect on the date
hereof, and as amended, supplemented or otherwise modified in a manner permitted
by the Agent's Loan Agreement.
(bb) "Notes Trustee" means X.X. Xxxxxx Trust Company, National
Association, as indenture trustee under the Notes Indenture, and each successor
indenture trustee thereunder.
(cc) "Permitted Acquisition" has the meaning provided to such term in
the Notes Indenture, whether or not any of the Notes Debt is outstanding or the
Notes Indenture remains effective.
(dd) "Permitted Acquisition Assets" means any fixed assets purchased by
Company or any Subsidiary in connection with a Permitted Acquisition, but only
if and to the extent that such Permitted Acquisition is financed in whole or in
part with the proceeds of loans made under the Agent's Loan Agreement.
(ee) "Pledged Account" means a cash collateral account maintained at a
financial institution acceptable to Agent that is pledged (i) on a senior basis,
to Agent as security for Agent's Debt, in a manner acceptable to Agent and (ii)
on a junior basis, to each of the Bonds Trustee as security for the Bonds Debt
and the Notes Trustee as security for the Notes Debt, in a manner acceptable to
the Bonds Trustee and the Notes Trustee, respectively.
(ff) "Project Assets" means all of the pollution control equipment and
fixtures located at Company's Weirton, West Virginia steel-making facility, the
purchase and/or installation of which were financed or refinanced with the
proceeds of the Pollution Control Revenue Refunding Bonds (Weirton Steel
Corporation Project) Series 1989 issued by the Bonds Issuer.
(gg) "Security Documents" means the deeds of trust, security agreements
and other agreements, instruments and documents now or hereafter securing all or
any portion of Collateral Agent's Debt.
(hh) "Subsidiary" means any entity of which Company owns, directly or
indirectly through one or more intermediaries, more than 50% of the voting
interests at the time of determination.
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(ii) "Tandem Mill Collateral" means the real property constituting
Company's No. 9 Tandem Mill located at Company's Weirton, West Virginia
steel-making facility and which is legally described on Exhibit A-2 attached to
the Agent's Loan Agreement, as in effect on the date hereof, together with all
equipment and fixtures now or hereafter located thereon (whether or not later
moved), including without limitation the equipment listed on Exhibit A-3
attached to the Agent's Loan Agreement, as in effect on the date hereof and all
property of the types described in clauses (viii), (ix) and (x) of the
definition of the term "Collateral" and related to any of the foregoing.
(jj) "Tandem Mill Financing Proceeds" means the cash proceeds of an
Approved Financing Transaction, net of all legal, title and recording tax
expenses, commissions and other fees and expenses incurred in connection with
such Approved Financing Transaction.
(kk) "Tandem Mill Sale Proceeds" means the cash proceeds of an Approved
Sale and Leaseback relating to the Tandem Mill Collateral, net of all legal,
title and recording tax expenses, commissions and other fees and expenses
incurred in connection with such Approved Sale and Leaseback and any capital
gains taxes incurred in connection with such Approved Sale and Leaseback.
(ll) "Tin Mill Collateral" means the real property constituting
Company's Tin Mill located at Company's Weirton, West Virginia steel-making
facility and which is legally described on Exhibit A-6 attached to the Agent's
Loan Agreement, as in effect on the date hereof, together with all equipment and
fixtures now or hereafter located thereon (whether or not later moved),
including without limitation the equipment listed on Exhibit A-7 attached to the
Agent's Loan Agreement, as in effect on the date hereof and all property of the
types described in clauses (viii), (ix) and (x) of the definition of the term
"Collateral" and related to any of the foregoing.
Each term used in this Agreement and not otherwise defined herein shall
have the meaning ascribed to such term in the Uniform Commercial Code of the
State of Illinois.
3. Priorities; Subordination; Payments; Standby.
(a) Agent and each Lien Holder each agrees that regardless of the time
or order of attachment, or the time, order or manner of perfection, or the time
or order of filing or recording of financing statements or mortgages or deeds of
trust, Agent's lien on and security interest in the Collateral shall be senior
to that of each Lien Holder in the Collateral. Each Lien Holder agrees to
subordinate, and does hereby subordinate, any liens and security interests it
now or hereafter has in and upon the Collateral under Collateral Agent's
Documents or otherwise to the liens and security interests of Agent in and upon
the Collateral; such subordination shall be effective with respect to each item
of Collateral until either (i) all of the commitments to make loans under the
Agent's Loan Agreement have been terminated and all of Agent's Debt has been
fully paid and indefeasibly satisfied in cash (or
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otherwise to the satisfaction of Agent) or (ii) Agent has released all of its
liens on such Collateral.
(b) Regardless of whether a default exists under any of Collateral
Agent's Documents, no Lien Holder shall, without the prior written consent of
Agent, take any action to enforce any lien on or security interest in, or
exercise any other rights with respect to, the Collateral (including without
limitation any action to commence a foreclosure action with respect to the
Collateral) until either (i) all of the commitments to make loans under the
Agent's Loan Agreement have been terminated and all of Agent's Debt has been
fully paid and indefeasibly satisfied in cash (or otherwise to the satisfaction
of Agent) or (ii) Agent has released all of its liens on such Collateral.
(c) (i) In the event Company desires to complete an Asset
Disposition of Collateral pursuant to an Approved Sale, a sale or other
disposition of Collateral pursuant to an Approved Sale and Leaseback,
or an Excepted Sale of Collateral, each Lien Holder shall be deemed to
have consented to such Approved Sale, Approved Sale and Leaseback or
Excepted Sale free and clear of any liens and security interests of
such Lien Holder; and each Lien Holder agrees that any purchaser of any
such Collateral, Company and Agent may rely on this Agreement as
evidence of such Xxxx Xxxxxx'x consent to such Approved Sale, Approved
Sale and Leaseback or Excepted Sale free and clear of any liens and
security interests of such Lien Holder in such Collateral and such Xxxx
Xxxxxx'x authorization to each of such purchaser, Company and Agent to
file deed of trust releases, UCC termination statements and other
appropriate releases with respect to the Collateral to be sold;
provided, that the Net Cash Proceeds, Tandem Mill Sale Proceeds, or
cash proceeds, as applicable, of such Approved Sale, Approved Sale and
Leaseback or Excepted Sale shall be distributed as set forth in Section
3(d) below. Each Lien Holder agrees to execute such deed of trust
releases, UCC termination statements and other appropriate releases
with respect to the Collateral subject to an Approved Sale, Approved
Sale and Leaseback or Excepted Sale as such purchaser, Company or Agent
requests; provided, that the failure of any Lien Holder to execute any
such deed of trust release, UCC termination statement or other
appropriate release shall not affect the right of such purchaser,
Company and Agent to rely on this Agreement.
(ii) In the event Company desires to complete an Approved
Financing Transaction, each Lien Holder shall be deemed to have
consented to such Approved Financing Transaction and to have
subordinated its lien on the applicable Tandem Mill Collateral to up to
$90,000,000 of indebtedness incurred in connection with such Approved
Financing Transaction secured by such Tandem Mill Collateral, provided
that Agent shall have contemporaneously received at least $25,000,000
of the proceeds of such Approved Financing Transaction and such amount
shall have been applied as set forth in Section 3(d)(vii) hereof. In
connection therewith, each Lien Holder agrees that any lender to
Company in an Approved Financing Transaction may rely on this Agreement
as evidence of such Xxxx Xxxxxx'x consent to such financing
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and agreement to subordinate its liens on such Tandem Mill Collateral
as set forth hereinabove.
(iii) In the event Company desires to complete a sale or other
disposition of any of the Tandem Mill Collateral pursuant to an
Approved Sale and Leaseback or an Approved Financing Transaction, Agent
agrees that, so long as Agent has received at least $25,000,000 of the
proceeds of such transaction for application to Agent's Debt, any
purchaser, lender or other party to such transaction may rely on this
Agreement as evidence of Agent's consent to such Approved Sale and
Leaseback or Approved Financing Transaction free and clear of any liens
and security interests of Agent on such Tandem Mill Collateral and
Agent's authorization to such person to file deed of trust releases,
UCC termination statements and other appropriate releases with respect
to such Tandem Mill Collateral. Agent agrees to execute such deed of
trust releases, UCC termination statements and other appropriate
releases with respect to such Tandem Mill Collateral as Company or such
other person requests; provided, that the failure of Agent to execute
any such deed of trust releases, UCC termination statements or other
appropriate releases shall not affect the right of Company and such
person to rely on this Agreement.
(iv) In the event Agent desires to release any amounts
contained in a Pledged Account hereunder in connection with the
purchase of replacement assets as set forth in Section 3(d)(iii), (iv)
or (vi) below or the repair, rebuilding or replacement of damaged or
destroyed Collateral pursuant to Section 3(d)(ix) below, each Lien
Holder will be deemed to have consented to such release and released
its liens and security interests in and to such amounts; and each Lien
Holder agrees that Company and Agent may rely on this Agreement as
evidence of such Xxxx Xxxxxx'x consent to such release free and clear
of any liens and security interests of such Lien Holder in such amounts
and such Xxxx Xxxxxx'x authorization to each of Company and Agent to
file any appropriate releases with respect to such amounts. Each Lien
Holder agrees to execute such releases with respect to such amounts as
Company or Agent requests; provided, that the failure of any Lien
Holder to execute any such release shall not affect the right of
Company and Agent to rely on this Agreement.
(d) The proceeds of each Approved Sale, Approved Sale and Leaseback,
Approved Financing Transaction, Excepted Sale or other sale, lease, conveyance
or other disposition of any Collateral shall be applied as set forth in this
clause (d), as follows:
(i) all cash proceeds of the sale, lease, conveyance or other
disposition of Collateral pursuant to a foreclosure sale or other
exercise of remedies with respect to the Collateral, or of the sale,
lease, conveyance or other disposition of Collateral during the
continuance of any proceeding instituted by or against Company or any
applicable Subsidiary under the United States Bankruptcy Code or any
similar state insolvency proceeding (including an assignment for the
benefit of creditors) shall be applied first, to Agent's Debt (and
shall permanently reduce the commitments under the Agent's Loan
Agreement and the maximum amount of Agent's Debt hereunder
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only to the extent required pursuant to the Agent's Loan Agreement), so
long as Agent has not previously released all of its liens on such
Collateral; and after the termination of Agent's Documents and the
indefeasible payment in cash (or otherwise to the satisfaction of
Agent) of Agent's Debt, to Collateral Agent's Debt;
(ii) all cash proceeds of the sale, lease, conveyance or other
disposition of Collateral pursuant to an Excepted Sale or any other
transaction that does not constitute an Approved Sale or an Approved
Sale and Leaseback, shall be applied first, to Agent's Debt (and shall
permanently reduce the commitments under the Agent's Loan Agreement and
the maximum amount of Agent's Debt hereunder only to the extent
required pursuant to the Agent's Loan Agreement), so long as Agent has
not previously released all of its liens on such Collateral; and after
the termination of all loan commitments under the Agent's Loan
Agreement and the indefeasible payment in cash (or otherwise to the
satisfaction of Agent) of Agent's Debt, to Collateral Agent's Debt;
(iii) all Net Cash Proceeds of an Approved Sale shall be
applied first, to Agent's Debt, and the commitments under the Agent's
Loan Agreement and the maximum amount of Agent's Debt hereunder shall
each be permanently reduced by the amount of such Net Cash Proceeds so
applied to Agent's Debt; and after the termination of all loan
commitments under the Agent's Loan Agreement and the indefeasible
payment in cash (or otherwise to the satisfaction of Agent) of Agent's
Debt, to Collateral Agent's Debt; provided, that if such permanent
application to Agent's Debt is not required pursuant to the Agent's
Loan Agreement, Company shall apply such Net Cash Proceeds to purchase
replacement assets or to redeem a portion of Collateral Agent's Debt or
Company's Series C Preferred Stock, all to the extent required or
otherwise permitted by Collateral Agent's Documents; provided, further,
that if such Net Cash Proceeds are to be used by Company to purchase
replacement assets, such Net Cash Proceeds shall be placed in and shall
remain in a Pledged Account and shall be released to Company as
required in order to permit the purchase of such replacement assets
(provided further, that if, pursuant to Agent's Documents, such pledged
amounts are at any time thereafter required to be applied against
Agent's Debt, the commitments under the Agent's Loan Agreement and the
maximum amount of Agent's Debt hereunder shall each be permanently
reduced by the amount of such pledged amounts so applied);
(iv) all Net Cash Proceeds of an Approved Sale and Leaseback
that is not related to the Tandem Mill Collateral shall be applied
first, to repay Agent's Debt, and the commitments under the Agent's
Loan Agreement and the maximum amount of Agent's Debt hereunder shall
each be permanently reduced by the amount of such Net Cash Proceeds so
applied to Agent's Debt; and, after the termination of all loan
commitments under the Agent's Loan Agreement and the indefeasible
payment in cash (or otherwise to the satisfaction of Agent) of Agent's
Debt, to Collateral Agent's Debt; provided, that if such permanent
application to Agent's Debt is not required pursuant to the Agent's
Loan Agreement, Company shall apply such Net Cash
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Proceeds to purchase replacement assets or to redeem a portion of
Collateral Agent's Debt or Company's Series C Preferred Stock, all to
the extent required or otherwise permitted by Collateral Agent's
Documents; provided, further, that if such Net Cash Proceeds are to be
used by Company to purchase replacement assets, such Net Cash Proceeds
shall be placed in and shall remain in a Pledged Account and shall be
released to Company as required in order to permit the purchase of such
replacement assets (provided, that if, pursuant to Agent's Documents,
such pledged amounts are at any time thereafter required to be applied
against Agent's Debt, the commitments under the Agent's Loan Agreement
and the maximum amount of Agent's Debt hereunder shall each be
permanently reduced by the amount of such pledged amounts so applied);
(v) all Tandem Mill Sale Proceeds of an Approved Sale and
Leaseback relating to the Tandem Mill Collateral that is consummated
concurrently with a Permitted Acquisition shall be applied as follows:
(A) $25,000,000 of such Tandem Mill Sale Proceeds shall be applied to
Agent's Debt, and the commitments under the Agent's Loan Agreement and
the maximum amount of Agent's Debt hereunder shall each be permanently
reduced only to the extent required pursuant to the Agent's Loan
Agreement; and (B) the balance of such Tandem Mill Sale Proceeds shall
be used to finance all or a portion of such Permitted Acquisition;
(vi) all Tandem Mill Sale Proceeds of an Approved Sale and
Leaseback relating to the Tandem Mill Collateral that is not
consummated concurrently with a Permitted Acquisition shall be applied
as follows: (A) 50% of such Tandem Mill Sale Proceeds shall be applied
to Agent's Debt, and the commitments under the Agent's Loan Agreement
and the maximum amount of Agent's Debt hereunder shall each be
permanently reduced only to the extent required pursuant to the Agent's
Loan Agreement; and (B) 50% (or such lesser percentage as may be
required pursuant to Collateral Agent's Documents) of such Tandem Mill
Sale Proceeds shall be used, at Company's election, to redeem a portion
of Company's Series C Preferred Stock, to redeem a portion of
Collateral Agent's Debt or for such other purpose as is required or
otherwise permitted by Collateral Agent's Documents; provided, that if
an Approved Sale and Leaseback relating to the Tandem Mill Collateral
is consummated at a time that all of the Notes Debt has been paid in
full, but any Bonds Debt is outstanding, and Company elects to use all
or a portion of the Tandem Mill Sale Proceeds thereof described in this
subclause (B) to purchase replacement assets, such portion of the
Tandem Mill Sale Proceeds shall be placed in and shall remain in a
Pledged Account and shall be released to Company as required in order
to permit the purchase of such replacement assets (provided, that if,
pursuant to Agent's Documents, such pledged amounts are at any time
thereafter required to be applied against Agent's Debt, the commitments
under the Agent's Loan Agreement and the maximum amount of Agent's Debt
hereunder shall each be permanently reduced by the amount of such
pledged amounts so applied);
- 11 -
(vii) all Tandem Mill Financing Proceeds of an Approved
Financing Transaction that is consummated concurrently with a Permitted
Acquisition shall be applied as follows: (A) $25,000,000 of such Tandem
Mill Financing Proceeds shall be applied to Agent's Debt, and the
commitments under the Agent's Loan Agreement and the maximum amount of
Agent's Debt hereunder shall each be permanently reduced only to the
extent required pursuant to the Agent's Loan Agreement or, if any Notes
Debt is outstanding, clause (iv) of the definition of the term
"Permitted Indebtedness" contained in the Notes Indenture or clause (a)
of the definition of the term "Permitted Liens" contained in the Notes
Indenture; and (B) the balance of such Tandem Mill Financing Proceeds
shall be used to finance all or a portion of such Permitted
Acquisition;
(viii) all cash proceeds of any of the transactions described
in clauses (iii) - (vii) above in excess of the amounts described in
such clauses shall be applied first, to Agent's Debt (and shall
permanently reduce the commitments under the Agent's Loan Agreement and
the maximum amount of Agent's Debt hereunder only to the extent
required in the Agent's Loan Agreement); and, after the termination of
all commitments to make loans under the Agent's Loan Agreement and the
indefeasible payment in cash (or otherwise to the satisfaction of
Agent) of Agent's Debt, to Collateral Agent's Debt;
(ix) all cash proceeds of Collateral consisting of insurance
arising from damage to or destruction of, the Collateral and all cash
proceeds of condemnation awards with respect to the Collateral, shall
be promptly delivered to Agent and placed in a Pledged Account pending
resolution of its application (provided, that if such pledged amounts
are, pursuant to Agent's Documents, at any time thereafter required to
be applied against Agent's Debt, the commitments under the Agent's Loan
Agreement and the maximum amount of Agent's Debt hereunder shall each
be permanently reduced by the amount of such pledged amounts so
applied); and (A) if Company determines that it desires to repair,
rebuild or replace the applicable Collateral with such proceeds, such
proceeds shall remain in such Pledged Account and shall be released to
Company as required in order to permit the repair, rebuilding or
replacement of the applicable Collateral (provided further, that if,
pursuant to Agent's Documents, such pledged amounts are at any time
thereafter required to be applied against Agent's Debt, the commitments
under the Agent's Loan Agreement and the maximum amount of Agent's Debt
hereunder shall each be permanently reduced by the amount of such
pledged amounts so applied), or (B) if Company determines not to
repair, rebuild or replace the applicable Collateral, such amount shall
be applied first, to Agent's Debt (and the commitments under the
Agent's Loan Agreement and the maximum amount of Agent's Debt hereunder
shall each be permanently reduced by the amount of such proceeds so
applied to Agent's Debt); and, after the termination of all commitments
to make loans under the Agent's Loan Agreement and the indefeasible
payment in cash (or otherwise to the satisfaction of Agent) of Agent's
Debt, to Collateral Agent's Debt; and
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(x) all cash proceeds of Collateral not described in clauses
(i) - (ix) above shall be applied first, to Agent's Debt (and shall
permanently reduce the commitments under the Agent's Loan Agreement
only the extent required in the Agent's Loan Agreement); and after the
termination of all commitments to make loans under the Agent's Loan
Agreement and the indefeasible payment in cash (or otherwise to the
satisfaction of Agent) of Agent's Debt, to Collateral Agent's Debt.
(e) If any Lien Holder receives any proceeds of Collateral which are to
be applied to Agent's Debt as provided above or to which Agent is otherwise
entitled hereunder, such Lien Holder shall hold such proceeds in trust and
deliver such proceeds in the same form received to Agent. If Agent receives any
proceeds of Collateral which are to be applied to Collateral Agent's Debt as
provided above or to which any Lien Holder is otherwise entitled hereunder,
Agent shall hold such proceeds in trust and deliver such proceeds in the same
form received to Collateral Agent.
(f) Neither any Lien Holder nor Agent shall contest the validity,
perfection, priority (as established pursuant to the terms of this Agreement) or
enforceability of any lien or security interest on or in the Collateral granted
by Company to any other party hereto.
(g) Each Lien Holder represents and warrants to Agent that, pursuant to
the Junior Intercreditor Agreement, Collateral Agent has been granted the power
and the right to (i) enter into this Agreement on behalf of each of the Bonds
Trustee and the Notes Trustee, (ii) bind itself, the Bonds Trustee and the Notes
Trustee as provided herein, and in particular, to subordinate the Bonds
Trustee's and the Notes Trustee's liens on and security interests in the
Collateral as provided herein and to otherwise limit the Bonds Trustee's and the
Notes Trustee's rights with respect to the Collateral as provided herein and
(iii) perform the obligations of Collateral Agent hereunder (including the
execution and delivery of appropriate releases and terminations with respect to
the Collateral); provided, however, that no representation or warranty is made
or shall be implied as to whether or not a subordination or release executed
solely by Collateral Agent is insurable by a title insurance company or is
otherwise legally sufficient. Each of the Notes Trustee and the Bonds Trustee
hereby represents and warrants to Agent that it has the power and the right to
(i) enter into this Agreement on behalf of itself and the holders of the Notes
and the Bonds, respectively, (ii) bind itself and the holders of the Notes and
the Bonds, respectively, as provided herein, and in particular to subordinate
the Bonds Trustee's and the Notes Trustee's liens on and security interests in
the Collateral as provided herein and to otherwise limit the Bonds Trustee's and
the Notes Trustee's rights with respect to the Collateral as provided herein and
(iii) perform the obligations of such Lien Holder hereunder.
(h) Nothing in this Agreement shall affect the right of any Lien
Holder, or any holder of the Bonds or the Notes, to receive any payment in
respect thereof pursuant to the terms of Collateral Agent's Documents, except
any such payment made with the proceeds of Collateral (which payments shall be
subject to the provisions of this Section 3).
- 13 -
(i) Nothing in this Agreement shall provide to (i) any Lien Holder any
right to enforce against Company any of the provisions of Agent's Documents or
any of the provisions of this Agreement that are intended to solely benefit
Agent and/or Company only, (ii) Agent any right to enforce against Company any
of the provisions of Collateral Agent's Documents or any of the provisions of
this Agreement that are intended to solely benefit a Lien Holder or a holder of
a Note or a Bond and/or Company only, except in each case, for actions to
enforce the proper application of the proceeds of Collateral in accordance with
the terms of this Agreement.
(j) Each Lien Holder acknowledges and agrees that no obligations and
liabilities of Company to Collateral Agent, solely in its capacity as
"Collateral Agent" under the Junior Intercreditor Agreement, under the Junior
Intercreditor Agreement are or shall be secured by any of the liens or security
interests created under the Security Documents and that such obligations and
liabilities, if any, shall at all times remain unsecured obligations of Company
to Collateral Agent.
(k) Notwithstanding anything to the contrary contained herein, none of
Agent or any Lien Holder shall be deemed to have released or be required to
release any Collateral which it may otherwise be deemed to have released or be
required to release hereunder in connection with an Approved Sale, an Approved
Sale and Leaseback or an Excepted Sale as provided hereunder, unless (i) the Net
Cash Proceeds or cash proceeds, as applicable, of such Approved Sale, Approved
Sale and Leaseback or Excepted Sale shall have been applied as provided in this
Agreement, (ii) if the Net Cash Proceeds or cash proceeds, as applicable, of
such Approved Sale, Approved Sale and Leaseback or Excepted Sale are to be
deposited into a Pledged Account pursuant to the terms hereof, Agent and each
Lien Holder shall have received a perfected security interest in and to all
funds contained in any such Pledged Account, and (iii) if the Net Cash Proceeds
or cash proceeds, as applicable, of such Approved Sale, Approved Sale and
Leaseback or Excepted Sale are to be used to purchase replacement properties or
assets, each of Agent and/or each Lien Holder, as applicable, has received a
perfected lien and security interest in and to such replacement properties or
assets pursuant to deeds of trust, mortgages, security agreements and/or other
security documents reasonably satisfactory to Agent and/or each Lien Holder, as
applicable.
4. Assignment. Each of each Lien Holder and Agent represents that it
has not assigned or transferred, and agrees that it will not assign or transfer
at any time this Agreement remains in effect, any right, claim or interest of
any kind in or to the Collateral, unless such right, claim and interest remains
subject to this Agreement. Each Lien Holder agrees to promptly notify Agent in
writing of the appointment of a successor Collateral Agent, Bonds Trustee or
Notes Trustee and Agent agrees to promptly notify each Lien Holder in writing of
the appointment of a successor Agent.
5. Waivers; Bankruptcy Financing. Each Lien Holder expressly waives all
notice of the acceptance by Agent of the subordination and other provisions of
this Agreement and all the notices not specifically required pursuant to the
terms of this Agreement whatsoever and each Lien Holder expressly waives
reliance by Agent upon the
- 14 -
subordination and other agreements as herein provided. Each of Agent and each
Lien Holder shall be entitled to manage and supervise its financing arrangement
with Company in accordance with applicable law and its usual practices without
affecting the validity or enforceability of this Agreement. This Agreement shall
be fully enforceable after the commencement, and during the continuance, of any
proceeding instituted by or against Company or any Subsidiary under the United
States Bankruptcy Code, in any similar state insolvency proceeding (including an
assignment for the benefit of creditors). The validity and enforceability of
this Agreement shall not be affected by (a) any and all actions which Agent
takes or omits to take (including without limitation actions with respect to the
creation, perfection or continuation of liens on or security interests in any
Collateral, actions with respect to the occurrence of an Event of Default under
Agent's Documents, actions with respect to the foreclosure upon, sale, release
or depreciation of, or failure to realize upon any of the Collateral), (b)
Agent's election, in any proceeding instituted under the United States
Bankruptcy Code of the application of Section 1111(b)(2) of the United States
Bankruptcy Code, and/or (c) any borrowing or grant of a security interest under
Section 363 or 364 of the United States Bankruptcy Code by Company, as debtor in
possession with respect to the Collateral. In that regard, each Lien Holder
agrees that (A) if Company desires to use cash collateral under Section 363 of
the United States Bankruptcy Code and Agent consents to such use, such Lien
Holder will also consent to such use without asserting any objection of any kind
(including an objection on the grounds of failure to provide adequate protection
for such Xxxx Xxxxxx'x junior lien on such Collateral), and (B) if Company
desires to obtain credit from Agent or any lender under the Agent's Loan
Agreement under Section 364 of the United States Bankruptcy Code to be secured
by the Collateral (or any other collateral securing Agent's Debt), such Lien
Holder will consent to such credit without asserting any objection of any kind
(including an objection on the grounds of failure to provide adequate protection
for such Xxxx Xxxxxx'x junior lien on such Collateral), in each case so long as
(i) each Lien Holder retains a lien on the post-petition Collateral with the
same priority as existed prior to the commencement of the applicable proceeding
under the United States Bankruptcy Code to the extent such Lien Holder may be
entitled to such a lien and such Lien Holder (on behalf of the applicable
holders of the Notes and the Bonds) is permitted to receive such payments of
interest during such proceeding as adequate protection as it may have been
entitled to hereunder and under the United States Bankruptcy Code, if any, and
(ii) the principal amount of the maximum commitments to provide such
post-petition financing, when aggregated with the principal amount of Agent's
Debt immediately prior to the commencement of such proceeding, does not exceed
the maximum amount of such indebtedness permitted by Collateral Agent's
Documents. Subject to the foregoing, each Lien Holder, each holder of Collateral
Agent's Debt, Agent and each holder of Agent's Debt shall have the right, during
the continuance of any proceeding instituted under the United States Bankruptcy
Code, to file its own proof of claim and vote such claim in the manner
determined by it.
6. Marshaling. Until such time as the commitments to make loans under
the Agent's Loan Agreement have been terminated and Agent's Debt has been fully
paid and indefeasibly satisfied in cash (or otherwise to the satisfaction of
Agent), or Agent shall have
- 15 -
released all of its liens on the Collateral, each Lien Holder hereby waives any
rights such Lien Holder has or may have in the future to require Agent to
marshal the Collateral (or any other collateral securing Agent's Debt), and
agrees that Agent may proceed against the Collateral (and all other collateral
securing Agent's Debt) in any order that it deems appropriate in the exercise of
its absolute discretion.
7. Representations Concerning Company: Liability of Parties. None of
the parties hereto, nor any of such party's directors, officers, agents or
employees, shall be responsible to any other party hereto or to any other person
for (i) Company's solvency, financial condition or ability to repay its
indebtedness to any party hereto, (ii) any oral or written statements of
Company, or (iii) the validity, sufficiency or enforceability of such
indebtedness, Collateral Agent's Documents, Agent's Documents or the security
interests and liens granted by Company to any party hereto. Each party hereto
has entered into its financing arrangement with Company based upon such party's
own independent investigation, and makes no warranty or representation to any
other party hereto, nor does such party rely on any warranty or representation
of any other party hereto, with respect to the matters referred to in this
paragraph.
8. Authority. Each of each Lien Holder and Agent hereby represents to
the others that it has full right, power and authority to execute and deliver
this Agreement and to perform its obligations hereunder. Agent further
represents and warrants to each Lien Holder that, pursuant to the Agent's Loan
Agreement, Agent has been granted the power and the right to (i) enter into this
Agreement on behalf of each lender under the Agent's Loan Agreement, (ii) bind
itself and each lender under the Agent's Loan Agreement as provided herein and
(iii) take all actions required to be taken by Agent hereunder.
9. Termination. This Agreement shall terminate in all respects upon
indefeasible repayment in cash (or otherwise to the satisfaction of Agent), of
Agent's Debt and termination of all commitments to make loans under the Agent's
Loan Agreement or Agent's release of its liens on all of the Collateral, at
which time each Lien Holder shall be free to exercise all of its rights and
remedies with respect to the Collateral.
10. Miscellaneous.
(A) THE VALIDITY OF THIS AGREEMENT, ITS CONSTRUCTION, INTERPRETATION,
AND ENFORCEMENT, AND THE RIGHTS OF THE PARTIES HERETO WITH RESPECT TO ALL
MATTERS ARISING HEREUNDER OR RELATED HERETO SHALL BE DETERMINED UNDER, GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS, WITHOUT
GIVING EFFECT TO ITS CONFLICT OF LAWS PRINCIPLES. EACH OF EACH LIEN HOLDER AND
AGENT HEREBY WAIVES ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE
OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER
- 16 -
COMMON LAW OR STATUTORY CLAIMS. EACH OF EACH LIEN HOLDER AND AGENT REPRESENTS
THAT IT HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS
JURY TRIAL RIGHTS. IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE
FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
(b) This Agreement contains the entire agreement among the parties
hereto with respect to this subject, and may only be modified by a writing
signed by each of the parties hereto.
(c) Either party's failure to exercise any right hereunder shall not be
construed as a waiver of the right to exercise the same or any other right at
any other time and from time to time thereafter, and such rights shall be
cumulative and not exclusive.
(d) The knowledge by either party of any breach or other non-observance
by the other party of the terms of this Agreement shall not constitute a waiver
thereof or of any obligations to be performed by such party hereunder.
(e) Paragraph headings used herein are for convenience only, and shall
not affect the meaning of any provision of this Agreement.
- 17 -
(f) All notices or consents required under the terms and provisions of
this Agreement shall be in writing and sent to the following addresses:
If to Collateral Agent, the Notes X.X. Xxxxxx Trust Company,
Trustee or the Bonds Trustee: National Association
--------------------------------------
--------------------------------------
Pittsburgh, Pennsylvania
-------------
Attention:
---------------------------
Facsimile #:
-------------------------
in each case, with a copy to: Weirton Steel Corporation
000 Xxxxx Xxxxxxx Xxxxx
Xxxxxxx, Xxxx Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxx, Senior Vice
President - Finance and
Administration
Facsimile No.: (000) 000-0000
If to Agent: Fleet Capital Corporation
Xxx Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Loan Administration Manager
Facsimile #: (000) 000-0000
With a copy to: Weirton Steel Corporation
000 Xxxxx Xxxxxxx Xxxxx
Xxxxxxx, Xxxx Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxx, Senior Vice
President - Finance and
Administration
Facsimile No.: (000) 000-0000
Notices shall be deemed to have been duly given (i) if delivered personally or
otherwise actually received, (ii) if sent by overnight delivery service, (iii)
if mailed by first class United States mail, postage prepaid, registered or
certified, with return receipt requested, or (iv) if sent by facsimile. Notice
mailed as provided in clause (iii) above shall be effective on the earlier of
the date of actual receipt or three (3) business days after its deposit. Notice
given in any other manner described in this paragraph shall be effective upon
receipt by the addressee thereof; provided, however, that if any notice is
tendered to an addressee and delivery thereof is refused by such addressee, such
notice shall be effective upon such tender.
(g) This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns. The term
"Company" shall
- 18 -
include, without limitation, any successor or assign of Company,
including without limitation a receiver, trustee or debtor in possession. This
Agreement shall be a continuing agreement and shall remain in full force and
effect notwithstanding the insolvency, liquidation or dissolution of Company.
(h) Each Lien Holder hereby agrees that any party that refinances
Agent's Debt in compliance with the terms of Collateral Agent's Documents, may
rely on and enforce this Agreement as if it were Agent. Each Lien Holder further
hereby agrees that it will, at the request of Agent, enter into an agreement, in
the form of this Agreement, mutatis mutandis, to subordinate any security
interests and liens it now or hereafter has in or upon the Collateral, to the
same extent as provided herein, to the party refinancing all or a portion of
Agent's Debt; provided, that the failure of any Lien Holder to execute such an
agreement shall not affect such party's right to rely on and enforce the terms
of this Agreement. This Section 10(h) will survive the termination of this
Agreement so long as any of either the Notes Debt or the Bonds Debt remains
outstanding.
(i) This Agreement shall be for the benefit of, and shall be
enforceable solely by, the parties hereto, and except as set forth in Section
3(c) above, no other person or entity shall be a third party beneficiary hereof
or have the right to enforce any of the provisions hereof.
- 19 -
IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of
the date first written above.
X.X. XXXXXX TRUST COMPANY,
NATIONAL ASSOCIATION, as Collateral Agent
By
--------------------------------------------
Its
-------------------------------------------
X.X. XXXXXX TRUST COMPANY,
NATIONAL ASSOCIATION, as the Notes Trustee
By
--------------------------------------------
Its
-------------------------------------------
X.X. XXXXXX TRUST COMPANY,
NATIONAL ASSOCIATION, as the Bonds Trustee
By
--------------------------------------------
Its
-------------------------------------------
FLEET CAPITAL CORPORATION, as Agent
By
--------------------------------------------
Its
-------------------------------------------
CONSENT
The undersigned hereby consents to the terms of the foregoing
Intercreditor Agreement and agrees to be bound by the terms thereof.
WEIRTON STEEL CORPORATION
By
--------------------------------------------
Its
-------------------------------------------
- 20 -
