GUARANTY AND SECURITY AGREEMENT
Dated November __, 2000
From
WHX CORPORATION
as Grantor
to
CITICORP USA, INC.
as Secured Party
T A B L E O F C O N T E N T S
Section Page
Section 1. Grant of Security..................................................2
Section 2. Security for Obligations...........................................2
Section 3. Grantors Remain Liable.............................................3
Section 4. Delivery and Control of Collateral.................................3
Section 5. Representations and Warranties.....................................4
Section 6. Further Assurances.................................................5
Section 7. Place of Perfection; Records.......................................6
Section 8. Voting Rights; Dividends; Etc......................................6
Section 9. Transfers and Other Liens; Additional Shares.......................7
Section 10. Secured Party Appointed Attorney-in-Fact...........................7
Section 11. Secured Party May Perform..........................................8
Section 12. The Secured Party's Duties.........................................8
Section 13. Remedies...........................................................8
Section 14. Indemnity and Expenses.............................................9
Section 15. Amendments; Waivers; Etc..........................................10
Section 16. Notices; Etc......................................................10
Section 17. Continuing Security Interest; Assignments under the Credit
Agreement.........................................................10
Section 18. Release; Termination..............................................10
Security Interest Absolute....................................................10
Section 20. Execution in Counterparts.........................................12
Section 21. Governing Law.....................................................13
Exhibit A - Form of Control Agreement (Securities Account)
GUARANTY AND SECURITY AGREEMENT
GUARANTY AND SECURITY AGREEMENT dated November 17, 2000 (this
"Agreement") made by WHX Corporation, a Delaware corporation (the "Grantor"), to
Citicorp USA, Inc. (the "Secured Party").
PRELIMINARY STATEMENTS.
(1) Wheeling-Pittsburgh Corporation, Wheeling-Pittsburgh Steel
Corporation, WP Steel Venture Corporation, Consumers Mining Company, WP Coal
Company, Xxxxx Oxygen Company, Monessen Southwestern Railway Company, Wheeling
Empire Company and Pittsburgh-Xxxxxxxx Corporation (collectively, the
"Borrowers") have entered into a Credit Agreement dated as of November 17, 2000
(said Agreement, as it may hereafter be amended, amended and restated,
supplemented or otherwise modified from time to time, being the "Credit
Agreement") with the Lender Parties and the Agent (each as defined therein).
(2) The Secured Party has agreed to make a Term Loan to the Borrowers
in an amount equal to $5,000,000, and has further agreed, subject to the
execution and delivery by the Grantor of this Agreement, to make an additional
Term Loan to the Borrowers in an amount equal to $30,000,000 in accordance with
the terms of the Credit Agreement (the "Additional Term Loans").
(3) The Grantor has security entitlements (the "Pledged Security
Entitlements") with respect to all of the financial assets (the "Pledged
Financial Assets") credited from time to time to the Grantor's account, Account
No. 03894 14 025 (the "Securities Account"), with Xxxxxxx Xxxxx Xxxxxx Inc. at
its office at 000 Xxxxxxx Xxxxxxxxxx Xxxxx 000, Xxxxxxx, Xxx Xxxx 00000.
(4) It is a condition precedent to the making of the Additional Term
Loans by the Secured Party under the Credit Agreement that the Grantor shall
have executed and delivered this Agreement and granted the assignment and
security interest contemplated by this Agreement with respect to the Pledged
Financial Assets.
(5) The Grantor will derive substantial direct and indirect benefit
from the transactions contemplated by the Credit Agreement.
(6) Terms defined in the Credit Agreement and not otherwise defined in
this Agreement are used in this Agreement as defined in the Credit Agreement as
of the date hereof. Further, unless otherwise defined in this Agreement or in
the Credit Agreement, terms defined in Article 8 or 9 of the Uniform Commercial
Code in effect in the State of New York ("N.Y. Uniform Commercial Code") and/or
in the Federal Book Entry Regulations (as defined below) are used in this
Agreement as such terms are defined in such Article 8 or 9 and/or the Federal
Book Entry Regulations. The term "Federal Book Entry Regulations" means (a) the
federal regulations contained in Subpart B ("Treasury/Reserve Automated Debt
Entry System (TRADES)") governing book-entry securities consisting of U.S.
Treasury bonds, notes and bills and Subpart D ("Additional Provisions") of 31
C.F.R. Part 357, 31 C.F.R. ss. 357.2, ss. 357.10
through ss. 357.14 and ss. 357.41 through ss. 357.44 and (b) to the extent
substantially identical to the federal regulations referred to in clause (a)
above (as in effect from time to time), the federal regulations governing other
book-entry securities.
NOW, THEREFORE, in consideration of the premises and in order to induce
the Secured Party to make the Additional Term Loan under the Credit Agreement in
an amount greater than $5,000,000, the Grantor hereby agrees with the Secured
Party as follows:
Section 1. Guaranty. (a) The Grantor hereby absolutely, unconditionally
and irrevocably guarantees the punctual payment when due, whether at scheduled
maturity or on any date of a required prepayment or by acceleration, demand or
otherwise, of the Obligations of the Borrowers now or hereafter existing under
or in respect of the Additional Term Loans (including, without limitation, any
extensions, modifications, substitutions, amendments or renewals of any or all
of the foregoing Obligations), whether for principal, interest, premiums, fees,
contract causes of action, costs, expenses or otherwise, to the extent that such
Obligations are owed to the Secured Party (such Obligations being the "Secured
Obligations"), and agrees to pay any and all expenses (including, without
limitation, reasonable fees and out-of-pocket expenses of counsel) incurred by
the Secured Party in enforcing any rights under this Agreement. Without limiting
the generality of the foregoing, the Grantor's liability shall extend to all
amounts that constitute part of the Secured Obligations and would be owed by any
Borrower to the Secured Party under or in respect of the Loan Documents but for
the fact that they are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving such Borrower.
Section 2. Grant of Security. The Grantor hereby assigns and pledges to
the Secured Party, and hereby grants to the Secured Party a security interest
in, the Grantor's right, title and interest in and to the following, whether now
owned or hereafter acquired by the Grantor, wherever located, and whether now or
hereafter existing or arising (collectively, the "Collateral"):
(a) the Securities Account, all Pledged Security Entitlements with
respect to all Pledged Financial Assets from time to time credited to the
Securities Account, and all Pledged Financial Assets, and all dividends,
interest, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or
all of such Pledged Security Entitlements or such Pledged Financial Assets;
(b) all proceeds of any and all of the Collateral including all
payments under insurance (whether or not the Secured Party is the loss
payee thereof), or any indemnity, warranty or guaranty, payable by reason
of loss or damage to or otherwise with respect to any of the foregoing
Collateral and, during the continuance of any event described in Section
8.4 of the Credit Agreement or a breach of this Agreement (an "Enforcement
Event"), cash.
Section 3. Security for Obligations. This Agreement secures the payment
of all obligations of the Grantor now or hereafter existing under this
Agreement, whether direct or indirect, absolute or contingent, and whether for
principal, reimbursement obligations, interest,
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fees, premiums, penalties, indemnifications, contract causes of action, costs,
expenses or otherwise as provided in this Agreement.
Section 4. Grantor Remains Liable. Anything herein to the contrary
notwithstanding, (a) the Grantor shall remain liable under the contracts and
agreements included in the Collateral to the extent set forth therein to perform
all of its duties and obligations thereunder to the same extent as if this
Agreement had not been executed, (b) the exercise by the Secured Party of any of
the rights hereunder shall not release the Grantor from any of its duties or
obligations under the contracts and agreements included in the Collateral and
(c) the Secured Party shall not have any obligation or liability under the
contracts and agreements included in the Collateral by reason of this Agreement
or any other Loan Document, nor shall the Secured Party be obligated to perform
any of the obligations or duties of the Grantor thereunder or to take any action
to collect or enforce any claim for payment assigned hereunder.
Section 5. Delivery and Control of Collateral. (a) All certificates or
instruments representing or evidencing Collateral shall be delivered to and held
by or on behalf of the Secured Party 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 Secured Party. The Secured Party shall have the right, at
any time after the occurrence and during the continuance of an Enforcement Event
and without notice to the Grantor, to transfer to or to register in the name of
the Secured Party or any of its nominees any or all of the Collateral, subject
only to the revocable rights specified in Section 15(a). In addition, the
Secured Party shall have the right at any time to exchange certificates or
instruments representing or evidencing Collateral for certificates or
instruments of smaller or larger denominations.
(b) With respect to any Collateral in which the Grantor has any right,
title or interest and that constitutes an uncertificated security, the Grantor
will cause the issuer thereof either (i) to register the Secured Party as the
registered owner of such security or (ii) to agree in writing with the Grantor
and the Secured Party that such issuer will comply with instructions with
respect to such security originated by the Secured Party without further consent
of the Grantor, such agreement to be in form and substance satisfactory to the
Secured Party.
(c) With respect to any Collateral in which the Grantor has any right,
title or interest and that constitutes a security entitlement, the Grantor will
cause the securities intermediary with respect to such security entitlement
either (i) to identify in its records the Secured Party as the entitlement
holder of such security entitlement against such securities intermediary or (ii)
to agree in writing with the Grantor and the Secured Party that such securities
intermediary will comply with entitlement orders (that is, notifications
communicated to such securities intermediary directing transfer or redemption of
the financial asset to which the Grantor has a security entitlement) originated
by the Secured Party without further consent of the Grantor, such agreement to
be in substantially the form of Exhibit A hereto or otherwise in form and
substance satisfactory to the Secured Party (such agreement being a "Securities
Account Control Agreement").
(d) The Grantor covenants and agrees that (i) the securities
entitlements maintained in the Securities Account shall consist only of (x) cash
or (y) securities issued or fully
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guaranteed by the United States government or any agency thereof and backed by
the full faith and credit of the United States and (ii) the equity value of the
securities entitlements maintained in the Securities Account shall be not less
than (A) if all of such securities entitlements consisting of securities have a
maturity of one year or less from the date of determination, 105% of the
Required Amount (as defined below), (B) if any of such securities entitlements
have a maturity of more than one year from the date of determination but all
such security entitlements have a maturity of less than 10 years from the date
of determination, 110% of the Required Amount and (C) if any of such securities
entitlements have a maturity of 10 years or more from the date of determination,
120% of the Required Amount. For purposes of this Section, "Required Amount"
means the sum of the Secured Obligations plus, until March 16, 2000, an amount
equal to 3% of the principal amount of the Additional Term Loans that have not
been syndicated by the Secured Party.
Section 6. Representations and Warranties. The Grantor represents and
warrants as follows:
(a) The Grantor is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware.
(b) The execution, delivery and performance by the Grantor of this
Agreement, and the consummation of the transactions contemplated hereby,
are within the Grantor's corporate powers, have been duly authorized by all
necessary corporate action, and do not contravene (i) the Grantor's charter
or by-laws or (ii) law or any contractual restriction binding on or
affecting the Grantor.
(c) This Agreement has been duly executed and delivered by the Grantor.
This Agreement is the legal, valid and binding obligation of the Grantor
enforceable against the Grantor in accordance with its terms, subject to
the effect of any applicable bankruptcy, insolvency, reorganization,
moratorium or similar law affecting creditor's rights generally and to
general principles of equity.
(d) The chief executive office of the Grantor is located at the address
set forth opposite the Grantor's name on the signature page hereof. The
Grantor's federal tax identification number is set forth opposite the
Grantor's name on the signature page hereof.
(e) The Grantor is the legal and beneficial owner of the Collateral
free and clear of any Lien, claim, option or right of others, except for
the security interest created under this Agreement. No effective financing
statement or other instrument similar in effect covering all or any part of
such Collateral is on file in any recording office, except such as may have
been filed in favor of the Secured Party. The Grantor has no the trade
names.
(f) All of the investment property owned by the Grantor and credited to
the Securities Account as of the date hereof is listed on Schedule I
hereto.
(g) All filings and other actions necessary or desirable to perfect and
protect the security interest in the Collateral created under this
Agreement have been authorized
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to be duly made or taken and are in full force and effect, and this
Agreement creates in favor of the Secured Party a valid and, together with
such filings and other actions when made, perfected first priority security
interest in the Collateral, securing the payment of the Secured
Obligations.
(h) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body or any other
third party is required for (i) the grant by the Grantor of the assignment,
pledge and security interest granted hereunder or for the execution,
delivery or performance of this Agreement by the Grantor, (ii) the
perfection or maintenance of the assignment, pledge and security interest
created hereunder (including the first priority nature of such assignment,
pledge or security interest), except for the filing of financing and
continuation statements under the Uniform Commercial Code, which financing
statements have been duly filed and are in full force and effect, and
effect and the actions described in Section 4, which actions have been
taken and are in full force and effect, or (iii) for the exercise by the
Secured Party of its voting or other rights provided for in this Agreement
or the remedies in respect of the Collateral pursuant to this Agreement,
except as may be required in connection with the disposition of any portion
of the Collateral by laws affecting the offering and sale of securities
generally.
Section 7. Further Assurances. (a) The Grantor agrees that from time to
time, at the expense of the Grantor, the Grantor will promptly execute and
deliver all further instruments and documents, and take all further action, that
may be necessary or desirable, or that the Secured Party may reasonably request,
in order to perfect and protect any pledge, assignment or security interest
granted or purported to be granted hereunder or to enable the Secured Party to
exercise and enforce its rights and remedies hereunder with respect to any
Collateral. Without limiting the generality of the foregoing, the Grantor will
promptly:
(i) if any such Collateral shall be evidenced by a
promissory note or other instrument, deliver and pledge to the
Secured Party hereunder such note or instrument duly indorsed and
accompanied by duly executed instruments of transfer or assignment,
all in form and substance satisfactory to the Secured Party;
(ii) execute and file such financing or continuation
statements, or amendments thereto, and such other instruments or
notices, as may be necessary or desirable, or as the Secured Party
may reasonably request, in order to perfect and preserve the
security interest granted or purported to be granted hereunder;
(iii) deliver and pledge to the Secured Party
certificates representing Collateral that constitutes certificated
securities, accompanied by undated stock or bond powers executed in
blank;
(iv) deliver to the Secured Party (A) certified copies
of the resolutions of the Board of Directors or Executive Committee
of the Grantor approving this Agreement, and of all documents
evidencing other necessary corporate action and governmental
approvals, if any, with respect to this Agreement, (B) a certificate
of the Secretary or an Assistant Secretary of the Grantor certifying
the names and true signatures of the officers
5
of the Grantor authorized to sign this Agreement and the other
documents to be delivered hereunder and (C) a favorable opinion of
counsel for the Grantor, in form and substance satisfactory to the
Secured Party, and
(v) deliver to the Secured Party evidence that all other
action that the Secured Party may deem reasonably necessary or
desirable in order to perfect and protect the security interest
created under this Agreement has been taken.
(b) The Grantor hereby authorizes the Secured Party to file one or more
financing or continuation statements, and amendments thereto, relating to all or
any part of the Collateral without the signature of the Grantor where permitted
by law. A photocopy or other reproduction of this Agreement or any financing
statement covering the Collateral or any part thereof shall be sufficient as a
financing statement where permitted by law.
(c) The Grantor will furnish to the Secured Party from time to time
statements and schedules further identifying and describing the Collateral of
the Grantor and such other reports in connection with such Collateral as the
Secured Party may reasonably request, all in reasonable detail.
Section 8. Place of Perfection; Records. The Grantor will keep its
chief executive office at the location therefor specified in Section 6(d) or,
upon 30 days' prior written notice to the Secured Party, at such other location
in a jurisdiction where all actions required by Section 7 shall have been taken
with respect to the Collateral of the Grantor. The Grantor will hold and
preserve its records relating to the Collateral and will permit representatives
of the Secured Party at any time during normal business hours to inspect and
make abstracts from such records and other documents.
Section 9. Voting Rights; Dividends; Etc. (a) So long as no Enforcement
Event shall have occurred and be continuing:
(i) The Grantor shall be entitled to exercise any and all voting and
other consensual rights pertaining to the Collateral or any part thereof
for any purpose; provided however, that the Grantor will not exercise or
refrain from exercising any such right if such action would have a
material adverse effect on the value of the Collateral or any part
thereof.
(ii) The Grantor shall be entitled to receive and retain any and all
dividends, interest and other distributions paid in respect of the
Collateral; provided, however, that after the occurrence and during the
continuance of an Enforcement Event, any and all
(A) dividends, interest and other distributions paid or
payable other than in cash in respect of, and instruments and other
property received, receivable or otherwise distributed in respect of,
or in exchange for, any Collateral,
(B) dividends and other distributions paid or payable in cash
in respect of any Collateral in connection with a partial or total
liquidation or dissolution or in connection with a reduction of
capital, capital surplus or paid-in-surplus and
8
(C) cash paid, payable or otherwise distributed in respect of
principal of, or in redemption of, or in exchange for, any Collateral
shall be, and shall be forthwith delivered to the Secured Party to hold
as, Collateral and shall, if received by the Grantor, be received in
trust for the benefit of the Secured Party, be segregated from the
other property or funds of the Grantor and be forthwith delivered to
the Secured Party as Collateral in the same form as so received (with
any necessary endorsement).
(iii) The Secured Party will execute and deliver (or cause to
be executed and delivered) to the Grantor all such proxies and other
instruments as the Grantor may reasonably request for the purpose of
enabling the Grantor to exercise the voting and other rights that it is
entitled to exercise pursuant to paragraph (i) above and to receive the
dividends or interest payments that it is authorized to receive and
retain pursuant to paragraph (ii) above.
(b) Upon the occurrence and during the continuance of any Enforcement
Event:
(i) All rights of the Grantor (x) to exercise or refrain from
exercising the voting and other consensual rights that it would
otherwise be entitled to exercise pursuant to Section 9(a)(i) shall,
upon notice to the Grantor by the Secured Party, cease and (y) to
receive the dividends, interest and other distributions that it would
otherwise be authorized to receive and retain pursuant to Section
9(a)(ii) shall automatically cease, and all such rights shall thereupon
become vested in the Secured Party, which shall thereupon have the sole
right to exercise or refrain from exercising such voting and other
consensual rights and to receive and hold as Collateral such dividends,
interest and other distributions.
(ii) All dividends, interest and other distributions that are
received by the Grantor contrary to the provisions of paragraph (i) of
this Section 9(b) shall be received in trust for the benefit of the
Secured Party, shall be segregated from other funds of the Grantor and
shall be forthwith paid over to the Secured Party as Collateral in the
same form as so received (with any necessary endorsement).
(iii) The Secured Party shall be authorized to send to each
Securities Intermediary as defined in and under any Control Agreement a
Notice of Exclusive Control as defined in and under such Control
Agreement.
Section 10. Other Liens. The Grantor agrees that it will not create or
suffer to exist any Lien upon or with respect to any of the Collateral of the
Grantor except for the pledge, assignment and security interest created under
this Agreement.
Section 11. Secured Party Appointed Attorney-in-Fact. The Grantor
hereby irrevocably appoints the Secured Party the Grantor's attorney-in-fact,
with full authority in the place and stead of the Grantor and in the name of the
Grantor or otherwise, from time to time , upon the occurrence and during the
continuance of an Enforcement Event, in the Secured Party's discretion, to take
any action and to execute any instrument that the Secured Party may deem
7
necessary or advisable to accomplish the purposes of this Agreement, including,
without limitation:
(a) to ask for, demand, collect, xxx for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become due
under or in respect of any of the Collateral,
(b) to receive, indorse and collect any drafts or other instruments,
documents and chattel paper, in connection with clause (a) above, and
(c) to file any claims or take any action or institute any
proceedings that the Secured Party may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of
the Secured Party with respect to any of the Collateral.
Section 12. Secured Party May Perform. If the Grantor fails to perform
any agreement contained herein, the Secured Party may, but without any
obligation to do so and without notice, itself perform, or cause performance of,
such agreement, and the expenses of the Secured Party incurred in connection
therewith shall be payable by the Grantor under Section 15(b).
Section 13. The Secured Party's Duties. The powers conferred on the
Secured Party hereunder are solely to protect the Secured Party's interest in
the Collateral and shall not impose any duty upon it to exercise any such
powers. Except for the safe custody of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Secured Party shall
have no duty as to any Collateral, as to ascertaining or taking action with
respect to calls, conversions, exchanges, maturities, tenders or other matters
relative to any Collateral, whether or not the Secured Party has or is deemed to
have knowledge of such matters, or as to the taking of any necessary steps to
preserve rights against any parties or any other rights pertaining to any
Collateral. The Secured Party shall be deemed to have exercised reasonable care
in the custody and preservation of any Collateral in its possession if such
Collateral is accorded treatment substantially equal to that which it accords
its own property.
Section 14. Remedies. If any Enforcement Event shall have occurred and
be continuing:
(a) The Secured Party 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 the Secured Party upon
default under the N.Y. Uniform Commercial Code (whether or not the N.Y.
Uniform Commercial Code applies to the affected Collateral) and also may:
(i) require the Grantor to, and the Grantor hereby agrees that it will at
its expense and upon request of the Secured Party forthwith, assemble all
or part of the Collateral as directed by the Secured Party and make it
available to the Secured Party at a place and time to be designated by the
Secured Party that is reasonably convenient to both parties and (ii)
without notice except as specified below, sell the Collateral or any part
thereof in one or more parcels at public or private sale, at any of the
Secured Party's offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as the Secured Party may deem
8
commercially reasonable. The Grantor agrees that, to the extent notice of
sale shall be required by law, at least ten days' notice to the Grantor of
the time and place of any public sale or the time after which any private
sale is to be made shall constitute reasonable notification. The Secured
Party shall not be obligated to make any sale of Collateral regardless of
notice of sale having been given. The Secured Party may adjourn any public
or private sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice, be made at the
time and place to which it was so adjourned.
(b) Any cash held by or on behalf of the Secured Party and all cash
proceeds received by or on behalf of the Secured Party in respect of any
sale of, collection from, or other realization upon all or any part of the
Collateral may, in the discretion of the Secured Party, be held by the
Secured Party as collateral for, and/or then or at any time thereafter
applied (after payment of any amounts payable to the Secured Party
pursuant to Section 23) in whole or in part by the Secured Party against,
all or any part of the Secured Obligations.
Any surplus of such cash or cash proceeds held by or on the behalf of the
Secured Party and remaining after payment in full of all the Secured
Obligations shall be paid over to the Grantor or to whomsoever may be
lawfully entitled to receive such surplus.
(c) All payments received by the Grantor under or in respect of the
Collateral shall be received in trust for the benefit of the Secured
Party, shall be segregated from other funds of the Grantor and shall be
forthwith paid over to the Secured Party in the same form as so received
(with any necessary endorsement).
Section 15. Indemnity and Expenses. (a) The Grantor agrees to
indemnify, defend and save and hold harmless the Secured Party and each of its
Affiliates and their respective officers, directors, employees, agents and
advisors (each, an "Indemnified Party") from and against, and shall pay on
demand, any and all claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable fees and out-of-pocket expenses of
counsel) that may be incurred by or asserted or awarded against any Indemnified
Party, in each case arising out of or in connection with or resulting from this
Agreement (including, without limitation, enforcement of this Agreement), except
to the extent such claim, damage, loss, liability or expense is found in a
final, non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party's gross negligence or willful misconduct.
(b) The Grantor will upon demand pay to the Secured Party the amount of
any and all reasonable expenses, including, without limitation, the reasonable
fees and expenses of its counsel and of any experts and agents, that the Secured
Party may incur in connection with (i) the administration of this Agreement,
(ii) the custody, preservation, use or operation of, or the sale of, collection
from or other realization upon, any of the Collateral of the Grantor, (iii) the
exercise or enforcement of any of the rights of the Secured Party hereunder or
(iv) the failure by the Grantor to perform or observe any of the provisions
hereof.
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Section 16. Amendments; Waivers; Etc. (a) No amendment or waiver of any
provision of this Agreement, and no consent to any departure by the Grantor
herefrom, shall in any event be effective unless the same shall be in writing
and signed by the Secured Party, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given. No failure on the part of the Secured Party to exercise, and no delay in
exercising any right hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right.
Section 17. Notices; Etc. All notices and other communications provided
for hereunder shall be in writing (including telegraphic, telecopier or telex
communication) and mailed, telegraphed, telecopied, telexed or delivered to the
Secured Party or the Grantor, addressed to it at its address set forth opposite
the its name on the signature pages hereto; or, as to any party, at such other
address as shall be designated by such party in a written notice to the other
parties. All such notices and other communications shall, when mailed,
telegraphed, telecopied or telexed, be effective when deposited in the mails,
delivered to the telegraph company, telecopied or confirmed by telex answerback,
respectively, addressed as aforesaid; except that notices and other
communications to the Secured Party shall not be effective until received by the
Secured Party. Delivery by telecopier of an executed counterpart of any
amendment or waiver of any provision of this Agreement shall be effective as
delivery of an original executed counterpart thereof.
Section 18. Continuing Security Interest. This Agreement shall create a
continuing security interest in the Collateral and shall (a) remain in full
force and effect until the later of (i) the payment in full in cash of the
Secured Obligations and (ii) the date that the Secured Party has syndicated in
full the Additional Term Loan, (b) be binding upon the Grantor, its successors
and assigns and (c) inure, together with the rights and remedies of the Secured
Party hereunder, to the benefit of the Secured Party and its successors.
Section 19. Release; Termination. Upon the later of (i) the payment in
full in cash of the Secured Obligations and (ii) the date that the Secured Party
has syndicated in full the Additional Term Loan, the pledge, assignment and
security interest granted hereby shall terminate and all rights to the
Collateral shall revert to the Grantor. Upon any such termination, the Secured
Party will, at the Grantor's expense, execute and deliver to the Grantor such
documents as the Grantor shall reasonably request to evidence such termination.
Upon the reduction of the Required Amount (as defined in Section 5(d), as a
result of a partial syndication of the Additional Term Loan or otherwise, the
Secured Party will, at the Grantor's expense, execute and deliver to the Grantor
such documents as the Grantor shall reasonably required to evidence the release
of the pledge, assignment and security interest granted hereby to the extent
that the equity value of the cash and other securities entitlements maintained
in the Securities Account exceeds the Required Amount.
Section 20. Security Interest Absolute. The Grantor guarantees that the
Secured Obligations will be paid strictly in accordance with their terms,
regardless of any law, regulation or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of the Secured Party with
respect thereto. The obligations of the Grantor under this Agreement are
independent of the Secured Obligations or any other Obligations of any Borrower
10
under or in respect of the Loan Documents, and a separate action or actions may
be brought and prosecuted against the Grantor to enforce this Agreement,
irrespective of whether any action is brought against any Borrower or whether
the Grantor or any Borrower is joined in any such action or actions. All rights
of the Secured Party and the pledge, assignment and security interest hereunder,
and all obligations of the Grantor hereunder, shall be irrevocable, absolute and
unconditional irrespective of, and the Grantor hereby irrevocably waives (to the
maximum extent permitted by applicable law) any defenses it may now have or may
hereafter acquire in any way relating to, any or all of the following:
(a) any lack of validity or enforceability of any Loan Document or
any other agreement or instrument relating thereto;
(b) 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
Obligations of any Borrower under or in respect of the Loan Documents or
any other amendment or waiver of or any consent to any departure from any
Loan Document, including, without limitation, any increase in the Secured
Obligations resulting from the extension of additional credit to any
Borrower or any of its Subsidiaries or otherwise;
(c) any taking, exchange, release or non-perfection of any
Collateral or any other collateral, or any taking, release or amendment or
waiver of or consent to departure from any guaranty, for all or any of the
Secured Obligations;
(d) any manner of application of any Collateral or any other
collateral, or proceeds thereof, to all or any of the Secured Obligations,
or any manner of sale or other disposition of any Collateral or any other
collateral for all or any of the Secured Obligations or any other
Obligations of any Borrower under or in respect of the Loan Documents;
(e) any change, restructuring or termination of the corporate
structure or existence of any Borrower or any of its Subsidiaries;
(f) any failure of the Secured Party to disclose any information
relating to the business, condition (financial or otherwise), operations,
performance, assets, nature of assets, liabilities or prospects of any
Borrower now or hereafter known to the Secured Party (the Grantor waiving
any duty on the part of the Secured Party to disclose such information);
(g) the failure of any other Person to execute this Agreement or any
other Collateral Document, guaranty or agreement or the release or
reduction of liability of the Borrowers or other grantor or surety with
respect to the Secured Obligations; or
(h) any other circumstance (including, without limitation, any
statute of limitations) or any existence of or reliance on any
representation by the Secured Party that might otherwise constitute a
defense available to, or a discharge of, the Grantor or a third party
grantor of a security interest.
11
This Agreement shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Secured Obligations is rescinded or
must otherwise be returned by the Secured Party or by any other Person upon the
insolvency, bankruptcy or reorganization of any Borrower or otherwise, all as
though such payment had not been made.
Section 21. Waivers and Acknowledgments. (a) The Grantor hereby
unconditionally and irrevocably waives promptness, diligence, notice of
acceptance, presentment, demand for performance, notice of nonperformance,
default, acceleration, protest or dishonor and any other notice with respect to
any of the Secured Obligations and this Agreement and any requirement that the
Secured Party protect, secure, perfect or insure any Lien or any property
subject thereto or exhaust any right or take any action against any Borrower or
any other Person or any Collateral.
(b) The Grantor hereby unconditionally and irrevocably waives any
right to revoke this Agreement and acknowledges that this Agreement is
continuing in nature and applies to all Secured Obligations, whether
existing now or in the future.
(c) The Grantor hereby unconditionally and irrevocably waives (i)
any defense with respect to the Grantor's obligations under this Agreement
arising by reason of any claim or defense based upon an election of
remedies by the Secured Party that in any manner impairs, reduces,
releases or otherwise adversely affects the subrogation, reimbursement,
exoneration, contribution or indemnification rights of the Grantor or
other rights of the Grantor to proceed against any of the Borrowers, any
other guarantor or any other Person or any Collateral and (ii) any defense
based on any right of set-off or counterclaim against or in respect of the
obligations of the Grantor hereunder.
(d) The Grantor acknowledges that the Secured Party may, without
notice to or demand upon the Grantor and without affecting the liability
of the Grantor under this Agreement, foreclose under any mortgage by
nonjudicial sale, and the Grantor hereby waives any defense to the
recovery by the Secured Party against the Grantor of any deficiency after
such nonjudicial sale and any defense or benefits that may be afforded by
applicable law.
(e) The Grantor hereby unconditionally and irrevocably waives any
duty on the part of the Secured Party to disclose to the Grantor any
matter, fact or thing relating to the business, condition (financial or
otherwise), operations, performance, properties or prospects of any
Borrower or any of its Subsidiaries now or hereafter known by the Secured
Party.
(f) The Grantor acknowledges that it will receive substantial direct
and indirect benefits from the financing arrangements contemplated by the
Loan Documents and that the waivers set forth in Section 20 and this
Section 21 are knowingly made in contemplation of such benefits.
Section 22. Subrogation. The Grantor hereby unconditionally and
irrevocably agrees not to exercise any rights that it may now have or hereafter
acquire against any Borrower or any other insider guarantor that arise from the
existence, payment, performance or enforcement of the Grantor's obligations
12
under or in respect of this Agreement, including, without limitation, any right
of subrogation, reimbursement, exoneration, contribution or indemnification and
any right to participate in any claim or remedy of the Secured Party against any
Borrower or any other insider guarantor or any Collateral, whether or not such
claim, remedy or right arises in equity or under contract, statute or common
law, including, without limitation, the right to take or receive from any
Borrower or any other insider guarantor, directly or indirectly, in cash or
other property or by set-off or in any other manner, payment or security on
account of such claim, remedy or right (collectively, the "Subrogated Claims"),
unless and until all of the Secured Obligations and all other amounts payable
under this Agreement shall have been paid in full in cash. If any amount shall
be paid to the Grantor in violation of the immediately preceding sentence at any
time prior to the payment in full in cash of the Secured Obligations, such
amount shall be received and held in trust for the benefit of the Secured Party,
shall be segregated from other property and funds of the Grantor and shall
forthwith be paid or delivered to the Secured Party in the same form as so
received (with any necessary endorsement or assignment) to be credited and
applied to the Secured Obligations and all other amounts payable under this
Agreement, whether matured or unmatured, or to be held as Collateral for any
Secured Obligations or other amounts payable under this Agreement thereafter
arising. If (i) the Grantor shall make payment to the Secured Party of all or
any part of the Secured Obligations and (ii) all of the Secured Obligations and
all other amounts payable under this Agreement shall have been paid in full in
cash, the Secured Party will, at the Grantor's request and expense, execute and
deliver to the Grantor appropriate documents, without recourse and without
representation or warranty, necessary to evidence the transfer by subrogation to
the Grantor of an interest in the Secured Obligations resulting from such
payment made by the Grantor pursuant to this Agreement.
Section 23. Execution in Counterparts. This Agreement may be executed
in any number of counterparts, each of which when so executed shall be deemed to
be an original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of an original executed
counterpart of this Agreement.
Section 24. Compensation. In consideration of the obligation of the
Grantor under this Agreement, the Secured Party hereby agrees that, so long as
no Enforcement Event shall have occurred and be continuing, cash interest paid
on that portion of the Additional Term Loans then owed to the Secured Party
shall be paid over to the Grantor, less an amount equal to the Eurodollar Rate
plus 0.60% per annum on such portion of the Additional Term Loans. In addition,
the Grantor shall be paid a fee equal to 3% of the principal amount of the
Additional Term Loans, which the Grantor agrees may be withdrawn by the Secured
Party from the Securities Account from time to time in such amounts as may be
required in connection with the syndication of the Additional Term Loans.
Section 25. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
13
IN WITNESS WHEREOF, the Grantor has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
Address for Notices/Chief Executive Office: WHX CORPORATION
------------------------------------------
________________________
________________________
Federal Tax
Identification Number:
By_____________________________
Address for Notices: CITICORP USA, INC.
_________________ By_____________________________
-----------------
14
Separately Executed
Exhibit A to the
Guaranty and Security Agreement
FORM OF CONTROL AGREEMENT
(Securities Account)
CONTROL AGREEMENT dated as of November __, 2000, among WHX
CORPORATION, a Delaware corporation (the "Grantor"), CITICORP USA, INC., as
Secured Party (the "Secured Party"), and XXXXXXX XXXXX XXXXXX INC. ("SSB"), as
securities intermediary (the "Securities Intermediary").
PRELIMINARY STATEMENTS:
(1) The Grantor has granted the Secured Party a security
interest (the "Security Interest") in account no. _______________ maintained by
the Securities Intermediary for the Grantor (the "Account").
(2) Terms defined in Article 8 or 9 of the Uniform Commercial
Code in effect in the State of New York ("N.Y. Uniform Commercial Code") are
used in this Agreement as such terms are defined in such Article 8 or 9.
NOW, THEREFORE, in consideration of the premises and of the
mutual agreements contained herein, the parties hereto hereby agree as follows:
Section 1. The Account. The Securities Intermediary represents
and warrants to, and agrees with, the Secured Party that:
(a) The Securities Intermediary maintains the Account for the
Grantor, and all property held by the Securities Intermediary for the
account of the Grantor is, and will continue to be, credited to the
Account.
(b) The Account is a securities account. The Securities
Intermediary is the securities intermediary with respect to the
property credited from time to time to the Account. The Grantor is the
entitlement holder with respect to the property credited from time to
time to the Account.
(c) The securities intermediary's jurisdiction with respect to
the Account is, and will continue to be for so long as the Security
Interest shall be in effect, the State of New York.
(d) Exhibit A attached hereto is a statement of the property
credited to the Account on the date hereof.
(e) The Securities Intermediary does not know of any claim to
or interest in the Account or any property credited to the Account,
except for claims and interests of the parties referred to in this
Agreement.
Section 2. Control by Secured Party. The Securities
Intermediary will (a) comply with all notifications it receives directing it to
transfer or redeem any property in the Account (each an "Entitlement Order") or
other directions concerning the Account (including, without limitation,
directions to distribute to the Secured Party proceeds of any such transfer or
redemption or interest or dividends on property in the Account) originated by
the Secured Party without further consent by the Grantor or any other person and
(b) provide copies of each such Entitlement Order to the Grantor promptly after
receipt.
Section 3. Grantor's Rights in Account.
(a) Except as otherwise provided in this Section 3, the
Securities Intermediary will comply with Entitlement Orders originated by the
Grantor without further consent by the Secured Party.
(b) Until the Securities Intermediary receives a notice from
the Secured Party that the Secured Party will exercise exclusive control over
the Account (a "Notice of Exclusive Control"), the Securities Intermediary may
distribute to the Grantor all interest and regular cash dividends on property in
the Account.
(c) The Securities Intermediary will not comply with any
Entitlement Order originated by the Grantor that would require the Securities
Intermediary to make a free delivery to the Grantor or any other person.
(d) If the Securities Intermediary receives from the Secured
Party a Notice of Exclusive Control, the Securities Intermediary will cease
(until such Notice of Exclusive Control is withdrawn):
(i) complying with Entitlement Orders or other directions
concerning the Account originated by the Grantor and
(ii) distributing to the Grantor interest and dividends on
property in the Account.
Section 4. Priority of Secured Party's Security Interest. (a)
The Securities Intermediary subordinates in favor of the Secured Party any
security interest, lien, or right of setoff it may have, now or in the future,
against the Account or property in the Account, except that the Securities
Intermediary will retain its prior lien on property in the Account to secure
payment for property purchased for the Account and normal commissions and fees
for the Account.
(b) The Securities Intermediary will not agree with any third
party that the Securities Intermediary will comply with Entitlement Orders
originated by the third party.
2
Section 5. Statements, Confirmations, and Notices of Adverse
Claims. (a) The Securities Intermediary will send copies of all statements and
confirmations for the Account simultaneously to the Grantor and the Secured
Party.
(b) When the Securities Intermediary knows of any claim or
interest in the Account or any property credited to the Account other than the
claims and interests of the parties referred to in this Agreement, the
Securities Intermediary will promptly notify the Secured Party and the Grantor
of such claim or interest and the resulting equity value of the property then
credited to the Account.
Section 6. The Securities Intermediary's Responsibility. (a)
Except for permitting a withdrawal, delivery, or payment in violation of Section
3, the Securities Intermediary will not be liable to the Secured Party for
complying with Entitlement Orders or other directions concerning the Account
from the Grantor that are received by the Securities Intermediary before the
Securities Intermediary receives and has a reasonable opportunity to act on a
Notice of Exclusive Control.
(b) The Securities Intermediary will not be liable to the
Grantor for complying with a Notice of Exclusive Control or with an Entitlement
Order or other direction concerning the Account originated by the Secured Party,
even if the Grantor notifies the Securities Intermediary that the Secured Party
is not legally entitled to issue the Notice of Exclusive Control or Entitlement
Order or such other direction unless the Securities Intermediary takes the
action after it is served with an injunction, restraining order, or other legal
process enjoining it from doing so, issued by a court of competent jurisdiction,
and had a reasonable opportunity to act on the injunction, restraining order or
other legal process.
(c) This Agreement does not create any obligation of the
Securities Intermediary except for those expressly set forth in this Agreement
and in Part 5 of Article 8 of the N.Y. Uniform Commercial Code. In particular,
the Securities Intermediary need not investigate whether the Secured Party is
entitled under the Secured Party's agreements with the Grantor to give an
Entitlement Order or other direction concerning the Account or a Notice of
Exclusive Control. The Securities Intermediary may rely on notices and
communications it believes given by the appropriate party.
Section 7. Indemnity. The Grantor will indemnify the
Securities Intermediary, its officers, directors, employees and agents against
claims, liabilities and expenses arising out of this Agreement (including,
without limitation, reasonable attorney's fees and disbursements), except to the
extent the claims, liabilities or expenses are caused by the Securities
Intermediary's breach of this Agreement, gross negligence or willful misconduct
as found by a court of competent jurisdiction in a final, non-appealable
judgment.
Section 8. Termination; Survival. (a) The Secured Party may
terminate this Agreement by notice to the Securities Intermediary and the
Grantor. If the Secured Party notifies the Securities Intermediary that the
Security Interest has terminated, this Agreement will immediately terminate.
3
(b) The Securities Intermediary may terminate this Agreement
on 60 days' prior notice to the Secured Party and the Grantor, provided that
before such termination the Securities Intermediary and the Grantor shall make
arrangements to transfer the property in the Account to another securities
intermediary that shall have executed, together with the Grantor, a control
agreement in favor of the Secured Party in respect of such property in
substantially the form of this Agreement or otherwise in form and substance
satisfactory to the Secured Party.
(c) Sections 6 and 7 will survive termination of this
Agreement.
Section 9. Governing Law. This Agreement and the Account will
be governed by the law of the State of New York. The Securities Intermediary and
the Grantor may not change the law governing the Account without the Secured
Party's express prior written agreement.
Section 10. Entire Agreement. This Agreement is the entire
agreement, and supersedes any prior agreements, and contemporaneous oral
agreements, of the parties to this Agreement concerning its subject matter.
Section 11. Amendments. No amendment of, or waiver of a right
under, this Agreement will be binding unless it is in writing and signed by the
party to be charged.
Section 12. Financial Assets. The Securities Intermediary
agrees with the Secured Party and the Grantor that, to the fullest extent
permitted by applicable law, all property credited from time to time to the
Account will be treated as financial assets under Article 8 of the N.Y. Uniform
Commercial Code.
Section 13. Notices. A notice or other communication to a
party under this Agreement will be in writing (including telegraphic or
telecopier communication) (except that Entitlement Orders may be given orally
and promptly confirmed in writing), will be mailed, telegraphed, telecopied or
delivered to the party's address set forth under its name below or to such other
address as the party may notify the other parties and will be effective on
receipt.
Section 14. Binding Effect. This Agreement shall become
effective when it shall have been executed by the Grantor, the Secured Party and
the Securities Intermediary, and thereafter shall be binding upon and inure to
the benefit of the Grantor, the Secured Party and the Securities Intermediary
and their respective successors and assigns.
Section 15. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of an original executed
counterpart of this Agreement.
4
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
WHX CORPORATION
By__________________________________
Title:
Address:
____________________________________
____________________________________
CITICORP USA, INC., as
Secured Party
By__________________________________
Title:
Address:
____________________________________
____________________________________
XXXXXXX XXXXX XXXXXX INC.
By___________________________________
Title:
Address:
____________________________________
____________________________________
5
