AMENDMENT NO. 7 TO
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
November 27, 1996
WCI Steel, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Gentlemen:
Congress Financial Corporation, a California corporation ("Congress") and
Security Pacific Business Credit Inc., a Delaware corporation ("Security
Pacific", and together with Congress, individually and collectively, "Lenders")
and Congress Financial Corporation, as agent for Lenders (in such capacity,
"Agent") have entered into financing arrangements with WCI Steel, Inc., an Ohio
corporation ("Borrower"), pursuant to which Agent on behalf of Lenders may make
loans and advances and provide other financial accommodations to Borrower, as
set forth in the Amended and Restated Loan and Security Agreement, dated as of
December 29, 1992, by and among Agent, Lenders and Borrower, as amended and
supplemented pursuant to Amendment No. 1 to Amended and Restated Loan and
Security Agreement, dated as of December 14, 1993, Amendment No. 2 to Amended
and Restated Loan and Security Agreement, dated as of July 13, 1994, Amendment
No. 3 to Amended and Restated Loan and Security Agreement, dated as of March 28,
1995, Amendment No. 4 to Amended and Restated Loan and Security Agreement, dated
as of February 23, 1996, Amendment No. 5 to Amended and Restated Loan and
Security Agreement, dated as of March 8, 1996, and Amendment No. 6 to Amended
and Restated Loan and Security Agreement, dated as of June 17, 1996 (as the same
is amended and supplemented hereby or may hereafter be further amended,
modified, supplemented, extended, renewed, restated or replaced, the "Loan
Agreement") and the other Financing Agreements (as such term is defined in the
Loan Agreement).
Borrower has requested that Agent and each of Lenders (a) consent to the
repurchase by Borrower of up to all of the Existing RSI Notes (as defined below)
pursuant to a tender offer and consent solicitation by Borrower, (b) permit
Borrower to incur certain indebtedness in connection with the issuance of the
New WCI Notes (as defined below), (c) permit Borrower to secure the New WCI
Notes by a lien on certain fixed assets of Borrower, (d) permit Borrower and
Niles Properties, Inc. to secure certain indebtedness in connection with the
VEBA Trust (as defined below) by a lien on certain fixed assets of Borrower, (e)
consent to a loan by Borrower to WCI Steel Holdings, Inc. (using a portion of
the proceeds received by Borrower from the issuance of the New WCI Notes), the
proceeds of which loan by Borrower to WCI Holdings, Inc. are to be used by WCI
Steel Holdings, Inc. to purchase up to all of the issued and outstanding common
shares of capital stock of Borrower not owned by The Renco Group, Inc., (f)
consent to the merger of WCI Steel Holdings, Inc. with and into Borrower, with
Borrower as the surviving corporation, (g) permit the payment by Borrower to The
Renco Group, Inc. of a dividend in an amount not to exceed $108,000,000 (using a
portion of the proceeds received by Borrower from the issuance of the New WCI
Notes and existing cash balances of Borrower) and to waive the failure of
Borrower to provide five (5) business days' prior notice to Agent of the payment
of such dividend, (h) permit certain executive compensation payments pursuant to
certain contractual arrangements of Borrower, and (i) certain other amendments
to the Loan Agreement.
In consideration of the foregoing, the mutual agreements and covenants
contained herein, and other good and valuable consideration, the adequacy and
sufficiency of which is hereby acknowledged, Agent, Lenders, and Borrower agree
as follows:
1. Definitions.
(a) Additional Definitions. As used herein, the following terms
shall have the respective meanings given to them below and the Loan Agreement
shall be deemed and is hereby amended to include, in addition and not in
limitation of, each of the following definitions:
(i) "Existing RSI Note Agreements" shall mean, individually
and collectively, each and all of the following (as the same now exist or may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced): (A) the Existing RSI Notes (B) the Indenture, dated as of December
14, 1993, between Borrower and the Existing RSI Note Trustee, as amended by the
First Supplemental Indenture, dated December 14, 1993, and the Second
Supplemental Indenture, dated of even date herewith, (C) the Open-End Mortgage,
Assignment of Rents, Security Agreement and Fixture Filing, dated as of December
14, 1993, by Borrower in favor of the Existing RSI Note Trustee, and (D) the
Security Agreement, dated as of December 14, 1993, between Borrower and the
Existing RSI Note Trustee.
(ii) "Existing RSI Notes" shall mean the 10 1/2% Senior Notes
due March 1, 2002, Series B issued by RSI (and assumed by Borrower as the
survivor of the Merger as such term is defined in Amendment No. 1 to Amended and
Restated Loan and Security Agreement, dated December 14, 1993) pursuant to the
Existing RSI Note Agreements in the original principal amount of $250,000,000,
as the same now exist or may hereafter be amended, modified, supplemented,
extended, renewed, restated or replaced.
-2-
(iii) "Existing RSI Note Trustee" shall mean Fleet National
Bank, formerly known as Shawmut Bank Connecticut, National Association, and its
successors and assigns, and any replacement or other trustee or collateral agent
under the Existing RSI Note Agreements.
(iv) "New WCI Note Agreements" shall mean, individually and
collectively, each and all of the following (as the same now exist or may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced): (A) the New WCI Notes, (B) the New WCI Note Indenture, (C) the
Purchase Agreement, dated November 22, 1996, between ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ Securities Corporation and Borrower with respect to the purchase from
Borrower of all of the New WCI Notes, (D) the New WCI Note Registration
Agreement, (E) the Open-End Mortgage, Assignment of Rents, Security Agreement
and Fixture Filing, dated of even date herewith, by Borrower in favor of the New
WCI Note Trustee, (F) the Security Agreement, dated of even date herewith, by
Borrower in favor of the New WCI Note Trustee, and (G) the Intercreditor
Agreement, dated of even date herewith, between the VEBA Trustee and the New WCI
Note Trustee.
(v) "New WCI Note Indenture" shall mean the Indenture, dated
of even date herewith, between Borrower and the New WCI Note Trustee with
respect to the New WCI Notes, as the same now exists or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced.
(vi) "New WCI Note Registration Agreement" shall mean the
Registration Rights Agreement, dated as of November 27, 1996, between Borrower
and the Initial Purchaser as in effect on such date.
(vii) "New WCI Notes" shall mean, individually and
collectively, each and all of the following (as the same now exist or may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced): (A) the 10% Senior Secured Notes due 2004, Series A (the "New WCI
Series A Notes") issued by Borrower pursuant to the New WCI Note Indenture in
the original principal amount of $300,000,000 and (B) the 10% Senior Secured
Notes due 2004, Series B (the "New WCI Series B Notes"), which have terms
identical to the terms of the New WCI Series A Notes offered to the holders of
the New WCI Series A Notes pursuant to a registration statement to be filed by
Borrower with the Securities and Exchange Commission.
(viii) "New WCI Note Trustee" shall mean Fleet National Bank,
and its successors and assigns, and any replacement or other trustee under the
New WCI Note Indenture.
(ix) "Niles" shall mean Niles Properties, Inc., an Ohio
corporation, and its successors and assigns.
-3-
(x) "VEBA Trust" shall mean a Voluntary Employee Beneficiaries
Association trust fund established under that certain 501(c)(9) Trust Agreement,
dated October 1, 1988, between ▇▇▇▇▇▇ Consolidated Industries and Bank One Trust
Company, N.A. to hold contributions by Borrower to fund postretirement health
care and life insurance obligations for the benefit of certain hourly employees
of Borrower.
(xi) "VEBA Trust Agreements" shall mean, individually and
collectively, each and all of the following (as the same now exist or may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced): (A) the VEBA Term Sheet, dated October 24, 1995, between Borrower and
the United Steelworkers of America, AFL-CIO-CLC, (B) the Open-End Mortgage,
dated of even date herewith, by Borrower in favor of the VEBA Trustee with
respect to the Real Property of Borrower located in Trumbull County, Ohio, (C)
the Security Agreement, dated of even date herewith, between Borrower and the
VEBA Trustee, (D) the Intercreditor Agreement, dated of even date herewith,
between VEBA Trustee and the New WCI Note Trustee, and (E) the Open-End
Mortgage, dated of even date herewith, by Niles in favor of the VEBA Trustee
with respect to the real property of Niles located in Trumbull County, Ohio.
(xii) "VEBA Trustee" shall mean Bank One Trust Company, N.A.,
a national banking association, and its successors and assigns, and any
replacement or other trustee under the VEBA Trust Agreements.
(xiii) "WCI Debt Tender Offer" shall mean the offer by WCI to
purchase for cash of up to all of the Existing RSI Notes, plus accrued and
unpaid interest pursuant to the WCI Debt Tender Offer Agreements.
(xiv) "WCI Debt Tender Offer Agreements" shall mean,
individually and collectively, the Offer to Purchase and Consent Solicitation,
dated October 23, 1996, by Borrower with respect to the repurchase by Borrower
of the Existing RSI Notes, as amended pursuant to the First Supplement to Offer
to Purchase and Consent Solicitation Statement, dated November 6, 1996, and the
Second Supplement to Offer to Purchase and Consent Solicitation Statement, dated
November 8, 1996, and all other agreements, documents and instruments related
thereto, as the same now exist or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.
(xv) "WCI Holdings" shall mean WCI Steel Holdings, Inc., a
Delaware corporation, and its successors and assigns.
(xvi) "WCI Holdings Equity Tender Agreements" shall mean,
individually and collectively, the Offer to Purchase
-4-
For Cash, dated October 28, 1996, by WCI Holdings with respect to the offer to
purchase up to all of the WCI Public Shares at a price of $10.00 per share (net
to the seller), as amended pursuant to the First Supplement to Offer to Purchase
For Cash, dated November 18, 1996, and all agreements, documents and instruments
executed and/or delivered in connection therewith, as all of the foregoing now
exist or may hereafter be amended, modified, supplemented, extended, renewed,
restated or replaced.
(xvii) "WCI Holdings Equity Tender Offer" shall mean the offer
by WCI Holdings to purchase for cash up to all of the WCI Public Shares of
Borrower pursuant to the WCI Holdings Equity Tender Agreements.
(xviii) "WCI Holdings Merger" shall mean the merger of WCI
Holdings with and into Borrower with Borrower as the surviving corporation,
pursuant to the terms of the WCI Holdings Merger Agreements.
(xix) "WCI Holdings Merger Agreements" shall mean,
individually and collectively, the Agreement of Merger, dated as of November 26,
1996, by and between WCI Holdings and Borrower, the Certificate of Merger of
Borrower for filing with the Ohio Secretary of State with respect to the merger
of WCI Holdings and Borrower, the Certificate of Ownership and Merger of WCI
Holdings for filing with the Delaware Secretary of State with respect to the WCI
Holdings Merger, and all related agreements, documents and instruments, as the
same now exist or may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced.
(xx) "WCI Public Shares" shall mean all of the issued and
outstanding shares of common stock of Borrower which are not owned by Renco
Group.
(b) Amendments to Definitions.
(i) Section 1.4 of the Loan Agreement is hereby amended by
adding the following clause between the word "taxes" and the period appearing at
the end of such Section:
"provided, further, that, solely for purposes of Sections 7.5(c)(ii),
7.6(b)(iii) and 7.7(b) of the Loan Agreement, the charges in the amount
not to exceed $45,000,000 incurred by Borrower under the WCI Debt Tender
Offer, the WCI Holdings Equity Tender Offering and the issuance of the New
WCI Notes and in connection with contractual compensation payments to
certain executives of Borrower as permitted by Section 10 of Amendment No.
7 to Amended and Restated Loan and Security, dated November 27, 1996,
among Agent, Lenders and Borrower shall not be included in the calculation
of After-Tax Profits."
-5-
(ii) All references to the term "Borrower" or "Debtor" in any
of the Financing Agreements shall be deemed and each such reference is hereby
amended to mean WCI Steel, Inc., an Ohio Corporation, as survivor of the WCI
Holdings Merger, and its successors and assigns.
(iii) All references to the term "Cash Equivalents" in any of
the Financing Agreements shall be deemed and each such reference is hereby
amended to mean: (A) evidence of indebtedness with a maturity of two (2) years
or less issued or directly and fully guaranteed or insured by the United States
of America or any agency or instrumentality thereof; provided, that, the full
faith and credit of the United States of America is pledged in support thereof,
except in the case of any such evidence of indebtedness issued by the Student
Loan Marketing Association, the Federal National Mortgage Association, a Federal
Farm Credit Bank or a Federal Home Loan Bank so long as any such evidence of
indebtedness issued by such federal governmental entity is rated at least A-1 by
Standard & Poor's Ratings Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies,
Inc., or at least P-1 by ▇▇▇▇▇'▇ Investors Service, Inc.; provided, that, for
purposes of Section 7.5(b) of the Loan Agreement, up to twenty (20%) percent of
the aggregate amount of all Cash Equivalents may include evidence of
indebtedness issued by any such federal governmental entity and commercial paper
or other securities described in subsection (C) below rated not less than BBB by
Standard & Poor's Corporation or not less than Baa by ▇▇▇▇▇'▇ Investors Service,
Inc.; (B) certificates of deposit or bankers' acceptances with a maturity of two
(2) years or less of any financial institution that is a member of the Federal
Reserve System having combined capital and surplus and undivided profits of not
less than Two Hundred Fifty Million Dollars ($250,000,000); (C) commercial paper
(including variable rate demand notes) with a maturity of two (2) years or less
issued by a corporation (except an Affiliate of Borrower) organized under the
laws of any State of the United States of America or the District of Columbia
and rated at least A-1 by Standard & Poor's Corporation or at least P-1 by
▇▇▇▇▇'▇ Investors Service, Inc.; provided, that, for purposes of Section 7.5(b)
of the Loan Agreement, up to twenty (20%) percent of the aggregate amount of all
Cash Equivalents may include evidence of indebtedness issued by the Student Loan
Marketing Association, the Federal National Mortgage Association, a Federal Farm
Credit Bank or a Federal Home Loan Bank and commercial paper or other securities
described in this subsection (C) rated not less than BBB by Standard & Poor's
Ratings Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., or not less
than Baa by ▇▇▇▇▇'▇ Investors Service, Inc.; (D) repurchase obligations with a
term of not more than thirty (30) days for underlying securities of the types
described in clause (A) above entered into with any bank meeting the
qualifications specified in clause (B) above; (E) repurchase agreements and
reverse repurchase agreements relating to
-6-
marketable direct obligations issued or unconditionally guaranteed by the United
States of America or issued by any governmental agency thereof and backed by the
full faith and credit of the United States of America, in each case maturing
within two (2) years or less from the date of acquisition; provided, that, the
terms of such agreements comply with the guidelines set forth in the Federal
Financial Agreements of Depository Institutions with Securities Dealers and
Others, as adopted by the Comptroller of the Currency on October 31, 1985; and
(F) investments in money market funds and mutual funds which invest
substantially all of their assets in securities of the types described in
clauses (A) through (E) above.
(c) Interpretation. For purposes of this Amendment, unless otherwise
defined herein, all terms used herein, including, but not limited to, those
terms used and/or defined in the recitals hereto, shall have the respective
meanings assigned thereto in the Loan Agreement.
2. Consents. Subject to the terms and conditions contained herein, Agent
and Lenders hereby consent to: (a) the repurchase by Borrower of up to all of
the Existing RSI Notes (as in effect on the date hereof) by Borrower pursuant to
the WCI Debt Tender Offer Agreements (as in effect on the date hereof), using a
portion of the proceeds received by Borrower from the issuance of the New WCI
Notes (as in effect on the date hereof) to pay for the repurchase of the
Existing RSI Notes (as in effect on the date hereof), (b) the purchase by WCI
Holdings of the WCI Public Shares pursuant to the WCI Holdings Equity Tender
Agreements (as in effect on the date hereof) using the proceeds of a loan by
Borrower to WCI Holdings (which loan shall be made by Borrower to WCI Holdings
using a portion of the proceeds received by Borrower from the issuance of the
New WCI Notes as in effect on the date hereof and existing cash balances of
Borrower), (c) the declaration and payment from legally available funds by
Borrower to Renco Group of a dividend of up to $108,000,000 (using a portion of
the proceeds received by Borrower from the issuance of the New WCI Notes as in
effect on the date hereof and existing cash balances of Borrower), (d) the grant
by Borrower to the VEBA Trustee of a security interest in and lien upon
substantially all of the real property, plant and equipment of Borrower located
in Trumbull County, Ohio to secure obligations of Borrower arising under and
pursuant to the VEBA Trust Agreements (as in effect on the date hereof), (e) the
grant by Niles to the VEBA Trustee of a security interest and lien upon
substantially all of the real property, plant and equipment of Niles located in
Trumbull County, Ohio to secure obligations of Borrower arising under and
pursuant to the VEBA Trust Agreements (as in effect on the date hereof), (f) the
grant by Borrower to the New WCI Note Trustee of a security interest in and lien
upon substantially all of the real property, plant and equipment of Borrower
located in Trumbull, Ohio pursuant to the New WCI Note
-7-
Agreements (as in effect on the date hereof) to secure the Indebtedness of
Borrower evidenced by the New WCI Notes (as in effect on the date hereof), (g)
the payment by Borrower to certain executives of Borrower of certain contractual
compensation pursuant to the terms and conditions of the agreements evidencing
such compensation, and (h) the WCI Holdings Merger pursuant to the WCI Holdings
Merger Agreements (as in effect on the date hereof).
3. Assumption and Acknowledgment.
(a) Contemporaneously with the effectiveness of the WCI Holdings
Merger, Borrower (as the survivor of the WCI Holdings Merger) hereby expressly
assumes, ratifies, restates and confirms the Obligations and the Financing
Agreements and confirms and ratifies its assumption of the Obligations and the
Financing Agreements pursuant to the WCI Holdings Merger Agreements and by
operation of law and its continuing liability in respect thereof as survivor of
the WCI Holdings Merger.
(b) Borrower as the survivor of the WCI Holdings Merger hereby
acknowledges, confirms and agrees that:
(i) Borrower is indebted to Lenders for loans and advances to
Borrower under the Financing Agreements, as of the close of business on November
26, 1996, in the aggregate principal amount of $ -0- and the aggregate amount of
$5,536,000 in respect of Letter of Credit Accommodations, together with all
interest accrued and accruing thereon (to the extent applicable), and all costs,
expenses and other charges relating thereto, all of which are unconditionally
owing by Borrower to Lenders, without offset, defense or counterclaim of any
kind, nature or description whatsoever; and
(ii) Agent and Lenders have and shall continue to have a
security interest in and lien upon the Collateral heretofore granted to Agent
and Lenders pursuant to the Financing Agreements to secure the Obligations, as
well as any Collateral otherwise granted to or held by Agent or Lenders.
(c) Without limiting the generality of the foregoing, (i) the WCI
Holdings Merger shall in no way, limit, impair or adversely affect the
Obligations now or hereafter owed to Agent or Lenders or any security interests
or liens of Agent or Lenders in the assets and properties of Borrower securing
the same and (ii) the security interests, liens and rights of Agent and Lenders
in and to such assets and properties of Borrower, as the surviving corporation
pursuant to the WCI Holdings Merger, shall continue to secure all Obligations of
Borrower arising prior to the effective time of the WCI Holdings Merger, in
addition to all other existing and future Obligations of Borrower to Agent and
Lenders arising thereafter or otherwise.
-8-
4. Indebtedness.
(a) Effective upon the consummation of the WCI Debt Tender Offer to
the extent all of the Existing RSI Notes are not tendered, Section 7.3(d) of the
Loan Agreement shall be deleted in its entirety and replaced with the following:
"(d) all Indebtedness of Borrower not to exceed the principal amount
of $300,000 evidenced by the Existing RSI Notes, plus interest thereon at
the rate provided for in the Existing RSI Notes as in effect on November
27, 1996; provided, that: (i) Borrower shall only make regularly scheduled
payments of principal and interest or other mandatory payments in respect
of such Indebtedness in accordance with the terms of the Existing RSI Note
Agreements as in effect on November 27, 1996, except Borrower may prepay,
in whole or in part, the Existing RSI Notes as in effect on November 27,
1996 so long as (A) Borrower provides Agent with two (2) Business Days'
prior written notice of the intention of Borrower to make any such
prepayment, (B) as of the date of any such prepayment, and after giving
effect thereto, no Obligations (other than pursuant to Letter of Credit
Accommodations and the costs, expenses and other charges relating thereto)
shall be then outstanding, and (C) no Event of Default, or act, condition
or event which with notice or passage of time or both would constitute an
Event of Default, exists or has occurred and is continuing; (ii) Borrower
shall not, directly or indirectly, (A) amend, modify, alter or change the
terms of the Existing RSI Note Agreements or any agreements, documents or
instruments executed and/or delivered in connection therewith or (B)
redeem, retire, defease, purchase or otherwise deposit or invest any sums
for such purpose, except for (1) mandatory repurchases of Existing RSI
Notes in connection with the sales of certain assets of Borrower (other
than the Collateral) and changes in control of Borrower or to the extent
permitted under this Section 7.3(d)(i) and (2) the redemption, retirement,
defeasance or purchase of the Existing RSI Notes so long as (aa) No Event
of Default, or act, condition or event which with notice or passage of
time or both would constitute an Event of Default, exists or has occurred
and is continuing and (bb) such redemptions, retirements, defeasance,
and/or purchases do not constitute a default or event of default under the
Existing RSI Note Agreements (as in effect on November 27, 1996) or the
New WCI Note Indenture (as in effect on November 27, 1996) or any other
agreement, document or instrument to which Borrower is a party or by which
or its assets are bound; (iii) Borrower shall furnish
-9-
to Agent and Lenders all notices, demands or other materials either
received from the Existing RSI Note Trustee, any of the holders of the
Existing RSI Notes, or on its or their behalf, promptly after receipt
thereof, or sent by Borrower, or on its behalf, to the Existing RSI Note
Trustee, any of the holders of the Existing RSI Notes, or any other
representative of the holders of the Existing RSI Notes concurrently with
the sending thereof, as the case may be; and (iv) such Indebtedness shall
only be secured by the Equipment and Real Property of Borrower and certain
other related assets and properties of Borrower as set forth on Exhibit K
hereto;"
(b) Section 7.3 of the Loan Agreement is hereby amended by adding a
new Section 7.3(m) as follows:
"(m) Indebtedness of Borrower up to the principal amount of
$300,000,000 evidenced by the New WCI Notes (as reduced by payments of
principal in respect thereof), plus interest thereon at the rate provided
for in the New WCI Notes as in effect on the date of the issuance thereof;
provided, that: (i) Borrower shall only make regularly scheduled payments
of principal and interest or other mandatory payments in respect of such
Indebtedness in accordance with the terms of the New WCI Notes as in
effect on the date of the issuance thereof, except that Borrower may
prepay, in whole or in part, the New WCI Notes as in effect on the date of
the issuance thereof, so long as (A) Borrower provides Agent with two (2)
Business Days' prior written notice of the intention of Borrower to make
any such prepayment, (B) as of the date of such prepayment and after
giving effect thereto, no Obligations (other than pursuant to Letter of
Credit Accommodations and the costs, expenses and other charges relating
thereto) shall be then outstanding, and (C) no Event of Default, or act,
condition or event which with notice or passage of time or both would
constitute an Event of Default, exists or has occurred and is continuing,
(ii) Borrower shall not, directly or indirectly, (A) amend, modify, alter
or change the terms of the New WCI Note Agreements or any agreements,
documents or instruments executed and/or delivered in connection therewith
as in effect on the original date of the execution and delivery thereof or
(B) redeem, retire, defease, purchase or otherwise deposit or invest any
sums for such purpose, except for (1) the issuance of the New WCI Series B
Notes to be offered to the holders of the New WCI Series A Notes in
exchange therefor pursuant to a registration statement filed with the
Securities and Exchange Commission or (2)
-▇▇-
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ of New WCI Notes as in effect on the original date
of issuance thereof in connection with the sales of certain assets of
Borrower (other than the Collateral) and changes in control of Borrower in
accordance with the terms and conditions of the New WCI Note Agreements as
in effect on the date of the execution and delivery thereof, (iii)
Borrower shall furnish to Agent and Lenders all notices, demands or other
materials either received from the New WCI Note Trustee or any of the
holders of the New WCI Notes, or on its or their behalf, promptly after
receipt thereof, or sent by Borrower, or on its behalf, to the New WCI
Note Trustee or any other representative of the holders of the New WCI
Notes or to any of the holders of the New WCI Notes, concurrently with the
sending thereof, as the case may be, and (iv) such Indebtedness shall only
be secured by the Equipment and Real Property of Borrower and certain
other related assets and properties of Borrower as set forth on Exhibit K
hereto;"
5. Limitation on Liens.
(a) Section 7.4(b) of the Loan Agreement is hereby deleted in its
entirety and the following substituted therefor:
"(b) the mortgages, liens upon or security interests in the
Equipment and Real Property of Borrower and certain other related assets
and properties of Borrower as set forth on Exhibit K hereto in favor of
(i) the Existing RSI Note Trustee to secure Indebtedness permitted under
Section 7.3(d) hereof to the extent any Indebtedness of Borrower evidenced
by the Existing RSI Notes (as in effect on November 27, 1996) remains
outstanding upon consummation of the WCI Debt Tender Offer, (ii) the New
WCI Note Trustee to secure Indebtedness permitted under Section 7.3(m)
hereof, and (iii) the VEBA Trustee for the VEBA Trust to secure the VEBA
Secured Obligations of Borrower under the VEBA Trust Agreements; provided,
that, (A) if, upon consummation of the WCI Debt Tender Offer, any of the
Existing RSI Notes remain outstanding, the second priority mortgages,
liens and security interests of the New WCI Note Trustee and the VEBA
Trustee shall rank pari passu, except that, if the Indebtedness evidenced
by the Existing RSI Notes shall be repaid in full, the mortgages, liens
and security interests of the Existing RSI Trustee with respect to the
Existing RSI Notes shall be terminated, released and discharged, and the
mortgages, liens and security interests of the New WCI Note Trustee shall,
without any further action, rank senior to the mortgages, liens and
security interests of the VEBA Trustee in the Equipment and Real Property
of Borrower and certain related assets and properties of Borrower as set
-11-
forth on Exhibit K hereto, (B) at all times that the Obligations or the
Indebtedness under the New WCI Notes and/or Existing RSI Notes remain
outstanding, the VEBA Trustee shall have agreed not to exercise any of its
rights or remedies pursuant to such mortgages, liens or security
interests, except to the extent permitted and directed by the New WCI Note
Trustee pursuant to the New WCI Note Agreements (as in effect on November
27, 1996), (C) Agent shall have received, in form and substance
satisfactory to Agent and Lenders, an agreement from each of the VEBA
Trustee and the New WCI Note Trustee permitting Agent, on behalf of
Lenders, to enter and use the Equipment and Real Property and other assets
and properties of Borrower subject to such mortgages, liens and security
interests permitted under this Section 7.4(b) to exercise the rights and
remedies of Agent and Lenders with respect to the Collateral, (D) Borrower
shall not, directly or indirectly, amend, modify, alter or change the
terms of the VEBA Trust Agreements or any agreements, documents or
instruments executed and/or delivered in connection therewith, and (E)
Borrower shall furnish to Agent and Lenders all notices, demands or other
materials either received from the VEBA Trustee or its or any of the
beneficiaries under the VEBA Trust Agreements, or on their behalf,
promptly after receipt thereof, or sent by Borrower, or on its behalf, to
the VEBA Trustee or its or any of the beneficiaries under the VEBA Trust
Agreements, concurrently with the sending thereof, as the case may be;"
(b) Section 7.4 of the Loan Agreement is hereby amended by replacing
the period with a semicolon and the word "and" appearing at the end of Section
7.4(f) and adding a new Section 7.4(g) as follows:
"(g) the mortgages, liens upon or security interests in
substantially all of the real property, plant and equipment of Niles
pursuant to the Open-End Mortgage, dated November 27, 1996, by Niles in
favor of the VEBA Trustee with respect to the premises of Niles located in
Trumbull County, Ohio to secure the obligations of Borrower under the VEBA
Trust Agreements (as in effect on November 27, 1996) and the negative
pledge by Youngstown Sinter pursuant to the VEBA Trust Agreements (as in
effect on November 27, 1996); provided, that, (i) at all times that the
Obligations or the Indebtedness under the New WCI Notes and/or Existing
RSI Notes remain outstanding, the VEBA Trustee shall have agreed not to
exercise any of its rights or remedies pursuant to such mortgages, liens
or security interests and (ii) Agent shall have received, in form and
substance satisfactory to Agent and Lenders, an agreement from the VEBA
Trustee permitting Agent on behalf of Lenders to enter and use the real
property, plant and equipment of Niles subject to such
-12-
mortgages, liens and security interests to exercise the rights and
remedies of Agent and Lenders with respect to the Collateral."
6. Loans, Investments, Guarantees.
(a) Section 7.5(c) of the Loan Agreement is hereby deleted in its entirety
and the following substituted therefor:
"(c) loans by Borrower to Renco Group as follows:
(i) loans in any fiscal year of Borrower commencing with the
fiscal year of Borrower ending October 31, 1996; provided, that, as to
each such loan, all of the following conditions are satisfied: (A) Excess
Availability shall have been not less than $25,000,000 at all times during
the ninety (90) consecutive day period immediately prior to the date of
making such loan, (B) after giving effect to the payment of any such loan,
Excess Availability shall be not less than $25,000,000, (C) the financial
projections provided by Borrower to Lender for the fiscal year of Borrower
in which such loan is made, prior to the commencement of such fiscal year,
shall reflect that Excess Availability is projected to be not less than
$25,000,000 for the ninety (90) day period immediately after (but not
including) the date of the making of such loan, (D) as of the date of
making of any such loan and after giving effect thereto, no Event of
Default, or act, condition or event which with notice or passage of time
or both would constitute an Event of Default shall exist or have occurred
and be continuing, and (E) Agent shall have received not less than ten
(10) Business Days prior written notice of the intention of Borrower to
make any such loans; or
(ii) in the event that any of the conditions to the making of
loans by Borrower to Renco Group set forth in Section 7.5(c)(i) are not
satisfied, loans in any fiscal year of Borrower not to exceed, in any
fiscal year of Borrower commencing with the fiscal year of Borrower ending
October 31, 1996, in the aggregate, an amount equal to: (A) fifty (50%)
percent of the cumulative After-Tax Profits of Borrower (or if cumulative
After-Tax Profits shall be a loss, minus one hundred (100%) percent of
such loss) earned subsequent to October 31, 1996 and prior to the date
such loan occurs (treating such period as a single accounting period)
minus (B) the aggregate amount of all dividends declared and paid by
Borrower to Renco Group in such period minus (C) the aggregate amount of
all management fees paid by Borrower to Renco Group in such period,
-13-
other than the monthly management fees contemplated under Section
7.6(b)(ii) below minus (D) the aggregate amount of all loans made by
Borrower to Renco Group (net of repayments and prepayments) in such
period, and still outstanding; provided, that, each of the following
conditions is satisfied as of the date of each such loan, as determined by
Agent: (1) no Event of Default or act, condition or event which with
notice or passage of time or both would constitute an Event of Default
exists or has occurred and is continuing or would exist or occur after
giving effect to such loan; (2) at the time of such loan and after giving
effect thereto, Borrower shall have Excess Availability of not less than
$5,000,000; and (3) Agent shall have received not less than ten (10) days
prior notice of any such loan;"
(b) Section 7.5 of the Loan Agreement is hereby amended to add a new
Section 7.5(j) thereto as follows:
"(j) a loan by Borrower to WCI Holdings as contemplated by the WCI
Holdings Equity Tender Offer, the proceeds of which are used by WCI
Holdings to purchase up to all of the issued and outstanding WCI Public
Shares; provided, that, (A) such loan shall be made by no later than
November 27, 1996, (B) such loan shall be made with a portion of the
proceeds received by Borrower from the issuance and sale of the New WCI
Notes and existing cash balances of Borrower, and (C) the amount of such
loan shall not exceed $60,000,000."
7. Transactions with Affiliates.
(a) Section 7.6(b)(ii) of the Loan Agreement is hereby deleted in its
entirety and the following substituted therefor:
"(ii) Borrower may pay to Renco Group monthly a management fee in an
amount not to exceed, on a non-cumulative basis, (A) $1,680,000 for the
fiscal year ending on October 31, 1997 and (B) $1,200,000 in any other
fiscal year; provided, that, no Event of Default or act, condition or
event which with notice or passage of time or both would constitute an
Event of Default exists or has occurred and is continuing, and the payment
of such fee would not result in an Event of Default or such act, condition
or event;"
(b) Section 7.6(b)(iii) of the Loan Agreement is hereby deleted in its
entirety and the following substituted therefor:
-14-
"(iii) Borrower may in any fiscal year of Borrower commencing with
the fiscal year of Borrower ending October 31, 1996 pay to Renco Group
management fees (in addition to those permitted to be paid under Section
7.6(b)(ii) above) as follows:
(A) Borrower may pay such management fees to Renco Group;
provided, that, each of the following conditions is satisfied: (1)
Excess Availability shall have been not less than $25,000,000 at all
times during the ninety (90) consecutive day period immediately
prior to the date of the payment of any such management fees, (2)
after giving effect to the payment of any such management fees,
Excess Availability shall be not less than $25,000,000, (3) the
financial projections provided by Borrower to Lender for the fiscal
year of Borrower in which such management fees are paid, prior to
the commencement of such fiscal year, shall reflect that Excess
Availability is projected to be not less than $25,000,000 for the
ninety (90) day period immediately after (but not including) the
date of the payment of such management fees, (4) as of the date of
the payment of such management fees and after giving effect thereto,
no Event of Default, or act, condition or event which with notice or
passage of time or both would constitute an Event of Default shall
exist or have occurred and be continuing, and (5) Agent shall have
received not less than ten (10) Business Days prior written notice
of the intention of Borrower to pay such management fees; or
(B) in the event that any of the conditions set forth in
Section 7.6(b)(iii)(A) above are not satisfied, Borrower may pay
such management fees to Renco Group in any such fiscal year up to,
in the aggregate, an amount equal to: (1) fifty (50%) percent of the
cumulative After-Tax Profits of Borrower (or if cumulative After-Tax
Profits shall be a loss, minus one hundred (100%) percent of such
loss) earned subsequent to October 31, 1996 and prior to the date
the payment occurs (treating such period as a single accounting
period) minus (2) the aggregate amount of all dividends declared and
paid by Borrower to Renco Group in such period minus (3) the
aggregate amount of all loans made by Borrower to Renco Group (net
of repayments and prepayments) in such period and still outstanding
minus (4) the aggregate amount of all management fees paid by
-15-
Borrower to Renco Group in such period, other than the monthly
management fees contemplated under Section 7.6(b)(ii) above;
provided, that, each of the following conditions is satisfied as of
the date of payment of any such management fees, as determined by
Agent: (aa) no Event of Default or act, condition or event which
with notice or passage of time or both would constitute an Event of
Default exists or has occurred and is continuing or would exist or
occur after giving effect to the payment of such fee; (bb) at the
time of the payment of such fee and after giving effect thereto,
Borrower shall have Excess Availability of not less than $5,000,000;
and (cc) Agent shall have received not less than ten (10) days prior
notice of any such management fees;"
8. Consolidated Adjusted Working Capital. Section 7.19 of the Loan
Agreement is hereby deleted in its entirety and the following substituted
therefor:
"7.19 Consolidated Adjusted Working Capital. Borrower and its
Subsidiaries shall, at all times, maintain a Consolidated Adjusted Working
Capital of not less than the following amounts during the following
respective periods:
Period Amount
------ ------
(a) From the date hereof through
October 30, 1993 $25,000,000
(b) From October 31, 1993 through
October 30, 1994 $40,000,000
(c) From October 31, 1994 through
October 30, 1995 $45,000,000
(d) From October 31, 1995 through
April 30, 1996 $50,000,000
(e) From May 1, 1996 through and
including October 31, 1996 $-0-
(f) From November 1, 1996 and at
all times thereafter ($75,000,000)"
9. Consolidated Adjusted Net Worth. Section 7.20 of the Loan Agreement is
hereby deleted in its entirety and the following substituted therefor:
-16-
"7.20 Consolidated Adjusted Net Worth. Borrower and its Subsidiaries
shall, at all times, maintain a Consolidated Adjusted Net Worth of not
less than the following amounts during the following respective periods:
Period Amount
------ ------
(a) From the date hereof through
October 30, 1993 $40,000,000
(b) From October 31, 1993 through
October 30, 1994 ($40,000,000)
(c) From October 31, 1994 through
and including April 30, 1996 ($30,000,000)
(d) From May 1, 1996 through and
including October 31, 1996 $-0-
(e) From November 1, 1996 and at
all times thereafter ($165,000,000)"
10. Contractual Compensation Payments to Certain Executives.
Notwithstanding anything to the contrary contained in Section 7.6 of the Loan
Agreement, but subject to the terms and conditions contained herein, Borrower
may, solely in connection with the transactions contemplated by this Amendment,
make payments on the date hereof to certain executives of Borrower for
compensation due to such executives in accordance with the terms and conditions
of the agreements as in effect on the date hereof between Borrower and such
executives evidencing such compensation in the aggregate amount not to exceed
$13,230,000.
11. Contingent Cash Consideration Rights. If a Control Event (as defined
in the WCI Holdings Equity Tender Agreements as in effect on the date hereof)
occurs within twelve (12) months from the date hereof, Borrower may make
payments in respect of the Contingent Cash Consideration Rights (as defined in
the WCI Holdings Equity Tender Agreements as in effect on the date hereof)
pursuant to the terms and conditions of the WCI Holdings Equity Tender
Agreements as in effect on the date hereof so long as none of the payments in
respect of the Contingent Cash Consideration Rights shall be made using proceeds
of any Loans.
12. Dividend Payment to Renco Group. Notwithstanding anything to the
contrary contained in Sections 7.5(c), 7.6(b)(iii) and 7.7(b) of the Loan
Agreement, the declaration and payment from legally available funds on November
27, 1996 by Borrower to Renco Group of the dividend in the amount of up to
$108,000,000 (using a portion of the proceeds received by
-17-
Borrower from the issuance of the New WCI Notes and existing cash balances of
Borrower) shall not be included for purposes of applying any of the tests with
respect to dividend payments to Renco Group contained in such Sections.
13. Waiver. Subject to the terms and conditions contained herein, Agent
and Lenders hereby waive, solely for purposes of the declaration and payment
from legally available funds by Borrower to Renco Group of the dividend in the
amount of up to $108,000,000 (using a portion of the proceeds received by
Borrower from the issuance of the New WCI Notes and existing cash balances of
Borrower), the failure of Borrower to provide five (5) Business Days' prior
notice to Agent of the payment of such dividend.
14. Fee. WCI hereby agrees to pay to Agent for the account of Lenders a
fee in an amount equal to $50,000, which amount shall be payable out of
available cash of Borrower, none of which cash shall be proceeds received by
Borrower from the issuance of the New WCI Notes, simultaneously with the
execution hereof, and which amount is fully earned as of the date hereof.
15. Representations, Warranties and Covenants. In addition to the
continuing representations, warranties and covenants heretofore or hereafter
made by Borrower or WCI Holdings to Agent and/or Lenders pursuant to the other
Financing Agreements, Borrower hereby represents, warrants and covenants with
and to Lenders as follows (which representations, warranties and covenants are
continuing and shall survive the execution and delivery hereof and shall be
incorporated into and made a part of the Financing Agreements):
(a) WCI Holdings Equity Tender Offer and Acquisition of WCI Public
Shares.
(i) WCI Holdings Equity Tender Offer and the transactions
contemplated thereunder have been duly executed, delivered and performed in
accordance with their terms by the respective parties thereto in all respects,
including the fulfillment (not merely the waiver, except as may be disclosed to
Agent and consented to in writing by Agent) of all conditions precedent set
forth therein and giving effect to the WCI Holdings Equity Tender Agreements and
the assignments to be executed and delivered by Renco Group and the holders of
the WCI Public Shares, WCI Holdings has acquired good and marketable title to
not less than 33,630,826 (92.4%) percent of all of the issued and outstanding
shares of capital stock of Borrower, free and clear of all claims, liens,
pledges and encumbrances of any kind, except as disclosed in writing to Agent.
(ii) All actions and proceedings required by the WCI Holdings
Equity Tender Agreements, applicable law or
-18-
regulation have been taken and the transactions required thereunder have been
duly and validly taken and consummated.
(iii) No court of competent jurisdiction has issued any
injunction, restraining order or other order which prohibits consummation of the
WCI Holdings Equity Tender Offer or the transactions described in the WCI
Holdings Equity Tender Agreements and no governmental or other action or
proceeding has been threatened or commenced, seeking any injunction, restraining
order or other order which seeks to void or otherwise modify the WCI Holdings
Equity Tender Offer or the transactions described in the WCI Holdings Equity
Tender Offer Agreements.
(iv) Borrower has delivered, or caused to be delivered, to
Agent true, correct and complete copies of the WCI Holdings Equity Tender Offer
Agreements.
(b) WCI Holdings Merger.
(i) The WCI Holdings Merger is valid and effective in
accordance with the terms of the WCI Holdings Merger Agreements, and the
corporation statutes of the States of Delaware and Ohio and Borrower is the
surviving corporation pursuant to the WCI Holdings Merger.
(ii) All actions and proceedings required by the WCI Holdings
Merger Agreements, applicable law and regulation have been taken and the
transactions required thereunder had been duly and validly taken and
consummated.
(iii) No court of competent jurisdiction has issued any
injunction, restraining order or other order which prohibits consummation of the
WCI Holdings Merger or the transactions described in the WCI Holdings Merger
Agreements and no governmental action or proceeding has been threatened or
commenced seeking any injunction, restraining order or other order which seeks
to void or otherwise modify the WCI Holdings Merger or the transactions
described in the WCI Holdings Merger Agreements.
(iv) Borrower has delivered, or caused to be delivered, to
Agent true, correct and complete copies of the WCI Holdings Merger Agreements.
(c) WCI Debt Tender Offer and Cancellation of Existing RSI Notes.
(i) The WCI Debt Tender Offer and the transactions
contemplated thereunder have been duly executed, delivered and performed in
accordance with their terms by the respective parties thereto in all respects,
including the fulfillment (not merely the waiver, except as may be disclosed to
-19-
Agent and consented to in writing by Agent) of all conditions precedent set
forth therein and giving effect to the terms of the WCI Debt Tender Offer
Agreements, all of the Existing RSI Notes tendered pursuant to the WCI Debt
Tender Offer have been purchased by Borrower and all obligations, liabilities
and Indebtedness of Borrower evidenced by or arising under such Existing RSI
Notes have been satisfied and performed and all such Existing RSI Notes have
been cancelled, and, if all of the Existing RSI Notes are tendered by the
holders of the Existing RSI Notes pursuant to the WCI Debt Tender Offer, or
otherwise acquired by Borrower all security interests in, and mortgages and
liens upon, any of the assets of Borrower to secure the Indebtedness evidenced
by or arising under the Existing RSI Notes shall be terminated and released.
(ii) All actions and proceedings required by the WCI Debt
Tender Offer Agreements, applicable law and regulation have been taken and the
transactions required thereunder had been duly and validly taken and
consummated.
(iii) No court of competent jurisdiction has issued any
injunction, restraining order or other order which prohibits consummation of the
WCI Debt Tender Offer or the transactions described in the WCI Debt Tender Offer
Agreements and no governmental action or proceeding has been threatened or
commenced seeking any injunction, restraining order or other order which seeks
to void or otherwise modify the WCI Debt Tender Offer or the transactions
described in the WCI Debt Tender Offer Agreements.
(iv) Borrower has delivered, or caused to be delivered, to
Agent true, correct and complete copies of the WCI Debt Tender Offer Agreements.
(d) New WCI Notes.
(i) The New WCI Notes have been duly authorized, issued and
delivered by Borrower and all agreements, documents and instruments related
thereto, including, but not limited to, the New WCI Note Indenture, have been
duly authorized, executed and delivered and the transactions contemplated
thereunder performed in accordance with their terms by the respective parties
thereto in all respects, including the fulfillment (not merely the waiver) of
all conditions precedent set forth herein. All actions and proceedings required
by the New WCI Note Agreements and the agreements, documents and instruments
related thereto, applicable law or regulation have been taken and the
transactions required thereunder have been duly and validly taken and
consummated. Neither the execution and delivery of the New WCI Notes, any of the
other New WCI Note Agreements or any of the instruments and documents to be
delivered pursuant thereto, nor the consummation of the transactions therein
contemplated, nor
-20-
compliance with the provisions therein contemplated, has violated or will
violate any law or regulation or any order or decree of any court or
governmental instrumentality in any respect or does or will conflict with or
result in the breach of, or constitute a default in any respect under, any
indenture, mortgage, deed of trust, agreement or instrument to which either
Borrower or WCI Holdings is a party or may be bound, or result in the creation
or imposition of any lien, charge or encumbrance upon any of the property of
Borrower or WCI Holdings (except as specifically contemplated hereunder or under
the other Financing Agreements) or violate any provision of the Certificate of
Incorporation or By-Laws of Borrower or WCI Holdings.
(ii) No court of competent jurisdiction has issued any
injunction, restraining order or other order which prohibits consummation of the
issuance of the New WCI Notes and the transactions described therein and no
governmental or other action or proceeding has been threatened or commenced,
seeking any injunction, restraining order or other order which seeks to void or
otherwise modify the issuance of the New WCI Notes.
(iii) Borrower has delivered, or caused to be delivered, to
Agent true, correct and complete copies of the New WCI Note Agreements and all
other agreements, documents and instruments existing as of the date hereof
relating thereto.
(e) No Default. No Event of Default exists on the date of this
Amendment (after giving effect to the amendments to the Loan Agreement made by
this Amendment).
(f) Corporate Power and Authority. This Amendment has been duly
executed and delivered by Borrower and WCI Holdings and is in full force and
effect as of the date hereof, and the agreements and obligations of Borrower and
WCI Holdings contained herein constitute legal, valid and binding obligations of
Borrower and WCI Holdings enforceable against Borrower and WCI Holdings in
accordance with their respective terms.
(g) Use of Proceeds. All of the payments by Borrower in connection
with the WCI Debt Tender Offer, the WCI Holdings Equity Tender Offer, the
dividend payment to Renco Group, the contractual compensation payments to
certain executives of Borrower and all other transaction fees and expenses
related to the WCI Debt Tender Offer, WCI Holdings Equity Tender Offer, the WCI
Holdings Merger or otherwise (other than the amendment fee hereunder, which fee
shall be paid using existing cash balances of Borrower) shall be paid utilizing
only the proceeds of the New WCI Notes and existing cash balances of Borrower,
and none of the proceeds of any Loans shall be used by Borrower to make any of
the foregoing payments.
-21-
16. Conditions Precedent. The effectiveness of the consents, waiver and
other terms and conditions contained herein shall be subject to the receipt by
Agent of each of the following, in form and substance satisfactory to Agent:
(a) evidence that: (i) the New WCI Notes, the other New WCI Note
Agreements and all agreements, documents and instruments relating thereto have
been duly authorized, executed and delivered by the parties thereto in
accordance with their terms and (ii) Borrower has received from or on behalf of
the holders of the New WCI Notes cash or other immediately available funds in
the aggregate amount of approximately $291,360,000 constituting the net proceeds
after transaction costs from the issuance of the New WCI Notes;
(b) evidence that the existing cash balances of Borrower and the
proceeds received by Borrower from or on behalf of the holders of the New WCI
Notes have been (i) used to make a loan to WCI Holdings, the proceeds of which
have been used by WCI Holdings to purchase the WCI Public Shares and (ii) used
by Borrower to repurchase up to all of the Existing RSI Notes and Borrower has
been released from all obligations and liabilities relating to such repurchased
Existing RSI Notes, and, if all of the Existing RSI Notes have been repurchased,
Borrower shall be released from all such obligations and liabilities relating
thereto and such arrangements shall otherwise be released and terminated;
(c) evidence that the WCI Holdings Equity Tender Agreements have
been duly executed and delivered by and to the appropriate parties thereto and
the transactions contemplated under the terms of the WCI Holdings Equity Tender
Agreements have been consummated prior to or contemporaneously with the
execution of this Amendment;
(d) evidence that Renco Group has validly contributed all of the
issued and outstanding capital stock of Borrower owned by Renco Group to WCI
Holdings;
(e) evidence that the WCI Holdings Merger Agreements have been duly
executed and delivered by and to the appropriate parties thereto and the
transactions contemplated under the terms of the WCI Holdings Merger Agreements
have been consummated prior to or contemporaneously with the execution of this
Amendment;
(f) evidence that the certificates of merger with respect to the WCI
Holdings Merger have been filed with the Secretary of State of the State of
Delaware and the Secretary of State of the State of Ohio and the WCI Holdings
Merger is valid and effective in accordance with the terms and provisions of the
WCI Holdings Merger Agreements and the applicable corporation statutes of the
State of Delaware and the State of Ohio;
-22-
(g) the intercreditor agreement between the New WCI Note Trustee on
behalf of the holders of the New WCI Notes, and Agent on behalf of Lenders, duly
authorized, executed and delivered by the New WCI Note Trustee and Borrower;
(h) the intercreditor agreement between the New WCI Note Trustee on
behalf of the holders of the New WCI Notes and the VEBA Trustee on behalf of the
beneficiaries of the VEBA Trust, providing for, among other things, the
agreement by the VEBA Trustee and/or the VEBA Trust (i) not to exercise any
rights and remedies pursuant to the VEBA Trust Agreements or otherwise so long
as any Indebtedness evidenced by or arising under the New WCI Notes is
outstanding (except as specifically directed by the New WCI Note Trustees) and
(ii) to permit Agent on behalf of Lenders to enter and use the real property,
equipment and other assets and properties subject to the lien of the VEBA
Trustee and/or VEBA Trust to exercise the rights and remedies with respect to
the Collateral;
(i) such consents, approvals or other agreements from Lenders and
Participants as may be required by Agent to effectuate the terms and provisions
of this Amendment;
(j) the opinion letter of counsel(s) to Borrower with respect to the
WCI Debt Tender Offer Agreements, the WCI Holdings Equity Tender Offer
Agreements, the WCI Holdings Merger Agreements, and such other matters as
Lenders may request; and
(k) an original of this Amendment, duly authorized, executed and
delivered by Borrower, WCI Holdings and Lenders.
17. Additional Events of Default. The parties hereto acknowledge, confirm
and agree that the failure of Borrower to comply with the covenants, conditions
and agreements contained herein shall constitute an Event of Default under the
Financing Agreements (subject to the applicable cure period, if any, with
respect thereto provided for in the Loan Agreement as in effect on the date
hereof).
18. Effect of this Amendment. Except as modified pursuant hereto, no other
waivers, changes or modifications to the Financing Agreements are intended or
implied, and in all other respects, the Financing Agreements are hereby
specifically ratified, restated and confirmed by all parties hereto as of the
effective date hereof. To the extent of conflict between the terms of this
Amendment and the other Financing Agreements, the terms of this Amendment shall
control.
19. Further Assurances. The parties hereto shall execute and deliver such
additional documents and take such additional actions as may be necessary to
effectuate the provisions and purposes of this Amendment.
-23-
20. Governing Law. The rights and obligations hereunder of each of the
parties hereto shall be governed by and interpreted and determined in accordance
with the laws of the State of New York.
21. Binding Effect. This Amendment shall be binding upon and inure to the
benefit of each of the parties hereto and their respective successors and
assigns. Any acknowledgment or consent contained herein shall not be construed
to constitute a consent to any other or further action by Borrower or WCI
Holdings or to entitle Borrower or WCI Holdings to any other consent. The Loan
Agreement and this Amendment shall be read and construed as one agreement.
22. Counterparts. This Amendment may be executed in any number of
counterparts, but all of such counterparts shall together constitute but one and
the same agreement. In making proof of this Amendment, it shall not be necessary
to produce or account for more than one counterpart thereof signed by each of
the parties thereto.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
-24-
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their authorized officers as of the day and year
first above written.
Very truly yours,
WCI STEEL, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
----------------------------------
Title: Vice President, Finance and CFO
-------------------------------
ACCEPTED AND AGREED:
CONGRESS FINANCIAL CORPORATION,
individually and as Agent
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------
Title: Vice President
----------------------
SECURITY PACIFIC BUSINESS CREDIT INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------
Title: Sr. Account Executive
----------------------
ACKNOWLEDGED AND CONSENTED TO:
WCI STEEL HOLDINGS, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇
-------------------------
Title: VP
----------------------
-25-