Exhibit 10.2

 

AMENDED AND RESTATED

SECURITY AGREEMENT

 

dated as of

May 20, 2003

and

amended and restated as of

October 22, 2004

 

among

 

UNITED STATES STEEL CORPORATION

 

and

 

JPMORGAN CHASE BANK,

as Collateral Agent

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TABLE OF CONTENTS

 

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          PAGE

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SECTION 1.  Definitions

   1

SECTION 2.  Grant of Transaction Liens

   5

SECTION 3.  General Representations and Warranties

   6

SECTION 4.  Further Assurances; General Covenants

   7

SECTION 5.  Cash Collateral Account

   8

SECTION 6.  Remedies Upon Event of Default

   10

SECTION 7.  Application of Proceeds

   10

SECTION 8.  Fees and Expenses; Indemnification

   12

SECTION 9.  Authority to Administer Collateral

   12

SECTION 10.  Limitation on Duty in Respect of Collateral

   13

SECTION 11.  General Provisions Concerning the Collateral Agent

   13

SECTION 12.  Termination of Transaction Liens; Release of Collateral

   15

SECTION 13.  Notices

   16

SECTION 14.  No Implied Waivers; Remedies Not Exclusive

   17

SECTION 15.  Successors and Assigns

   17

SECTION 16.  Amendments and Waivers

   17

SECTION 17.  Choice of Law

   17

SECTION 18.  Waiver of Jury Trial

   17

SECTION 19.  Severability

   17

SECTION 20.  Additional Secured Obligations

   18

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EXHIBITS:

 

Exhibit A        Perfection Certificate

 

ii

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AMENDED AND RESTATED SECURITY AGREEMENT

 

AMENDED AND RESTATED SECURITY AGREEMENT dated as of May 20, 2003 and amended and
restated as of October 22, 2004 among United States Steel Corporation, a
Delaware corporation (together with its successors, the “Borrower”) and JPMorgan
Chase Bank, as Collateral Agent.

 

WHEREAS, (i) the Borrower and the Collateral Agent and certain other parties
thereto have previously entered into a Credit Agreement dated as of May 20, 2003
(as amended prior to the date hereof, the “Existing Credit Agreement”) and (ii)
in connection therewith, the Borrower and the Collateral Agent are parties to a
Security Agreement dated as of May 20, 2003 (as amended prior to the date
hereof, the “Original Security Agreement”);

 

WHEREAS, the Borrower and the Collateral Agent and certain other parties thereto
are entering into the Credit Agreement (as defined below), which amends and
restates the Existing Credit Agreement, and pursuant to which the Borrower
intends to borrow funds and obtain letters of credit for the purposes set forth
therein;

 

WHEREAS, it is a condition to effectiveness of the Credit Agreement that the
Borrower amend and restate the Original Security Agreement by executing this
Amended Security Agreement (as defined below);

 

NOW, THEREFORE, in consideration of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree to amend and restate the Original Security Agreement as
follows:

 

SECTION 1.  Definitions.

 

(a)    Terms Defined in Credit Agreement.  Terms defined in the Credit Agreement
and not otherwise defined in subsection 1(b) or 1(c) have, as used herein, the
respective meanings provided for therein.

 

(b)    Terms Defined in UCC.  As used herein, each of the following terms has
the meaning specified in the UCC:

 

Term

   UCC

Account

   9-102

Authenticate

   9-102

Chattel Paper

Deposit Account . . . . . . . . . . . . . . . . . . . . . . . . .

   9-102
9-102

General Intangibles

   9-102

Instrument

   9-102

Inventory

   9-102

Letter-of-Credit Right

   9-102

 

(c)    Additional Definitions.  The following additional terms, as used herein,
have the following meanings:

 

“Administrative Agent” means JPMorgan Chase Bank, in its capacity as
administrative agent under the Loan Documents, and its successors in such
capacity.

 

“Agreement”, when used in reference to this Agreement, means the Amended
Security Agreement, as further amended or amended and restated from time to
time.

 

“Amended Security Agreement” means this Amended and Restated Security Agreement
dated as of May 20, 2003 and amended and restated as of October 22, 2004.

 

“Article 9” means Article 9 of the UCC.

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“Blocked Account” means each of the accounts described in Section 5(d) and any
other lockbox, deposit, concentration or similar account that has been subjected
to a Blocked Account Agreement pursuant to Section 4(a).

 

“Blocked Account Agreement” means, with respect to any account, a blocked
account agreement in favor of the Collateral Agent, all in form and substance
satisfactory to the Administrative Agent, the Collateral Agent and the
Co-Collateral Agent.

 

“Borrower” has the meaning set forth in the preamble to this Agreement.

 

“Cash Collateral Account” has the meaning set forth in Section 5.

 

“Collateral” means all property, whether now owned or hereafter acquired, on
which a Lien is granted or purports to be granted to the Collateral Agent
pursuant to the Security Documents.

 

“Collateral Agent” means JPMorgan Chase Bank, in its capacity as Collateral
Agent for the Secured Parties under the Security Documents, and its successors
in such capacity.

 

“Contracts” means all contracts for the sale, lease, exchange or other
disposition of Inventory, whether or not performed and whether or not subject to
termination upon a contingency or at the option of any party thereto.

 

“Credit Agreement” means the Amended and Restated Credit Agreement dated as of
May 20, 2003 and amended and restated as of October 22, 2004 among the Borrower,
the Lenders party thereto, the LC Issuing Banks party thereto, JPMorgan Chase
Bank, as Administrative Agent, Collateral Agent, Co-Syndication Agent and
Swingline Lender, and General Electric Capital Corporation, as Co-Collateral
Agent and Co-Syndication Agent, as further amended, restated or otherwise
modified from time to time in accordance with the terms thereof.

 

“Derivative Contract” means, with respect to any Derivative Obligation, the
written contract evidencing such Derivative Obligation.

 

“Derivative Obligation” means, with respect to the Borrower, any obligation of
the Borrower in respect of any rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar transaction (including any option with respect to any of
the foregoing transactions) or any combination of the foregoing transactions, in
each case owing to any Person that was a Lender or Lender Affiliate on the trade
date for such Derivative Obligation (or an assignee of such Person).

 

“Effective Date” means the Effective Date as defined in the Credit Agreement.

 

“Eligible Transferee” means (a) a special-purpose company created and used
solely for purposes of effecting a Receivables Financing, whether or not a
Subsidiary of the Borrower, or (b) any other Person which is not a Subsidiary of
the Borrower.

 

“Event of Default” means any Event of Default as defined in the Credit Agreement
and any similar event with respect to any Secured Derivative Obligation that
permits the acceleration of the maturity thereof (or an equivalent remedy).

 

“Existing Receivables SPV Accounts” has the meaning set forth in Section 5(b).

 

“First Secured Derivative Obligations” means the Derivative Obligations that are
designated by the Borrower as “First Secured Derivative Obligations” pursuant to
Section 20. For the avoidance of doubt, unless the context otherwise requires,
any reference herein to the “amount” or the “principal amount” of a First
Secured Derivative Obligation shall refer to then current Mark-to-Market Value
of such First Secured Derivative Obligation.

 

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“Lien Grantor” means the Borrower.

 

“Liquid Investment” means (i) direct obligations of the United States or any
agency thereof, (ii) obligations guaranteed by the United States or any agency
thereof, (iii) time deposits and money market deposit accounts issued by or
guaranteed by or placed with a Lender, and (iv) fully collateralized repurchase
agreements for securities described in clause (i) or (ii) above entered into
with a Lender, provided in each case that such Liquid Investment (x) matures
within 30 days after it is first included in the Collateral and (y) is in a
form, and is issued and held in a manner, that in the reasonable judgment of the
Collateral Agent permits appropriate measures to have been taken to perfect
security interests therein.

 

“Liquidated Secured Obligation” means at any time any Secured Obligation (or
portion thereof) that is not an Unliquidated Secured Obligation at such time.

 

“Mark-to-Market Value” means, at any date with respect to any Derivative
Obligation, the lesser of (i) the amount that would be payable by the Borrower
if the applicable Derivative Contract were terminated at such time in
circumstances in which the Borrower was the defaulting party, taking into
account the effect of any enforceable netting arrangement between the parties to
such Derivative Contract with respect to mutual obligations in respect of other
Secured Derivative Obligations between such parties and (ii) the amount stated
in the applicable Derivative Contract to be the maximum amount which can be
asserted as a secured claim against the Collateral.

 

“Opinion of Counsel” means a written opinion of legal counsel (who may be
counsel to the Lien Grantor or other counsel, in either case approved by the
Administrative Agent in a writing delivered to the Collateral Agent, which
approval shall not be unreasonably withheld) addressed and delivered to the
Collateral Agent.

 

“own” refers to the possession of sufficient rights in property to grant a
security interest therein as contemplated by UCC Section 9-203, and “acquire”
refers to the acquisition of any such rights.

 

“Perfection Certificate” means a certificate from the Lien Grantor substantially
in the form of Exhibit A, completed and supplemented with the schedules
contemplated thereby to the reasonable satisfaction of the Collateral Agent, and
signed by an officer of the Lien Grantor.

 

“Permitted Liens” means (i) the Transaction Liens and (ii) any other Liens on
the Collateral permitted to be created or assumed or to exist pursuant to the
Credit Agreement, including such Liens arising in connection with Receivables
Financings (including the Effective Date Receivables Financing).

 

“Pledged”, when used in conjunction with any type of asset, means at any time an
asset of such type that is included (or that creates rights that are included)
in the Collateral at such time. For example, “Pledged Inventory” means Inventory
that is included in the Collateral at such time.

 

“Post-Petition Interest” means any interest that accrues after the commencement
of any case, proceeding or other action relating to the bankruptcy, insolvency
or reorganization of the Lien Grantor (or would accrue but for the operation of
applicable bankruptcy or insolvency laws), whether or not such interest is
allowed or allowable as a claim in any such proceeding.

 

“Proceeds” means all proceeds of, and all other profits, products, rents or
receipts, in whatever form, arising from the collection, sale, lease, exchange,
assignment, licensing or other disposition of, or other realization upon, any
Collateral, including all claims of the Lien Grantor against third parties for
loss of, damage to or destruction of, or for proceeds payable under, or unearned
premiums with respect to, policies of insurance in respect of, any Collateral,
and any condemnation or requisition payments with respect to any Collateral.

 

“Receivables” means all Accounts owned by the Lien Grantor and all other rights,
titles or interests which, in accordance with GAAP would be included in
receivables on its balance sheet (including any such Accounts and/or rights,
titles or interests that might be characterized as Chattel Paper, Instruments or
General Intangibles

 

3

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under the Uniform Commercial Code in effect in any jurisdiction), in each case
arising from the sale, lease, exchange or other disposition of Inventory, and
all of the Lien Grantor’s rights to any goods, services or other property
related to any of the foregoing (including returned or repossessed goods and
unpaid seller’s rights of rescission, replevin, reclamation and rights to
stoppage in transit), and all collateral security and supporting obligations of
any kind given by any Person with respect to any of the foregoing.

 

“Receivables SPV” means U.S. Steel Receivables LLC, a Delaware limited liability
company and a wholly-owned Subsidiary of the Borrower.

 

“Related Documents” means the Credit Agreement, any promissory notes issued
pursuant to Section 2.09(e) of the Credit Agreement, the Security Documents, the
Subsidiary Guarantee Agreements and the documentation governing the Secured
Derivative Obligations.

 

“Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and
advisors of such Person and its Affiliates.

 

“Related Transferred Rights” has the meaning specified in Section 2(b) hereof.

 

“Release Conditions” means the following conditions for terminating all the
Transaction Liens:

 

(i)    all Commitments under the Credit Agreement shall have expired or been
terminated;

 

(ii)    all Liquidated Secured Obligations shall have been paid in full; and

 

(iii)    no Unliquidated Secured Obligation shall remain outstanding or such
Unliquidated Secured Obligation shall be cash collateralized to an extent and in
a manner reasonably satisfactory to each affected Secured Party.

 

“Second Secured Derivative Obligations” means all Secured Derivative Obligations
that are not First Secured Derivative Obligations. For the avoidance of doubt,
unless the context otherwise requires, any reference herein to the “amount” or
the “principal amount” of a Second Secured Derivative Obligation shall refer to
then current Mark-to-Market Value of such Second Secured Derivative Obligation.

 

“Secured Agreement”, when used with respect to any Secured Obligation, refers
collectively to each instrument, agreement or other document that sets forth
obligations of the Lien Grantor and/or rights of the holder with respect to such
Secured Obligation.

 

“Secured Derivative Obligations” means the Derivative Obligations that are
designated by the Borrower as additional Secured Obligations pursuant to Section
20.

 

“Secured Loan Obligations” means all principal of all Loans and LC Reimbursement
Obligations outstanding from time to time under the Credit Agreement, all
interest (including Post-Petition Interest) on such Loans and LC Reimbursement
Obligations and all other amounts now or hereafter payable by the Borrower
pursuant to the Loan Documents.

 

“Secured Obligations” means the Secured Loan Obligations and the Secured
Derivative Obligations.

 

“Secured Parties” means the holders from time to time of the Secured
Obligations, and “Secured Party” means any of them as the context may require.

 

“Security Documents” means this Agreement, the Intercreditor Agreement and all
other supplemental or additional security agreements, control agreements, or
similar instruments delivered pursuant to the Loan Documents.

 

“Supporting Obligation” means a “supporting obligation” (as such term is defined
in UCC Section 9-102).

 

4

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“Sweep Period” means (i) the period that begins on the first date on which
Facility Availability is less than or equal to $100,000,000 and ends on the
first date when all Release Conditions are satisfied and (ii) each period that
begins upon the occurrence of (x) an Event of Default described in Section 7(a),
Section 7(i), Section 7(j) or Section 7(k) of the Credit Agreement, or (y) an
Event of Default caused by the Borrower’s failure to perform the covenant
contained in Section 6.13 of the Credit Agreement, and ends when no Event of
Default is continuing; provided that, except in the case of a Sweep Period that
begins upon the occurrence of any Event of Default described in Section 7(a),
Section 7(i), Section 7(j) or Section 7(k) of the Credit Agreement with respect
to the Borrower (which Sweep Period shall commence automatically upon the
occurrence of such Event of Default), no Sweep Period shall be deemed to have
commenced unless and until the Collateral Agent shall have so determined and
shall have so notified the Borrower.

 

“Transaction Liens” means the Liens granted by the Lien Grantor under the
Security Documents.

 

“Transferred Receivables” means any Receivables that have been sold, contributed
or otherwise transferred to an Eligible Transferee in connection with a
Receivables Financing that is not prohibited under the Credit Agreement or this
Agreement (including, without limitation, the Effective Date Receivables
Financing).

 

“UCC” means the Uniform Commercial Code as in effect from time to time in the
State of New York; provided that, if perfection or the effect of perfection or
non-perfection or the priority of any Transaction Lien on any Collateral is
governed by the Uniform Commercial Code as in effect in a jurisdiction other
than New York, “UCC” means the Uniform Commercial Code as in effect from time to
time in such other jurisdiction for purposes of the provisions hereof relating
to such perfection, effect of perfection or non-perfection or priority.

 

“Unliquidated Secured Obligation” means, at any time, any Secured Obligation (or
portion thereof) that is contingent in nature or unliquidated at such time,
including any Secured Obligation that is:

 

(i)    an obligation to reimburse a bank for drawings not yet made under a
letter of credit issued by it;

 

(ii)    any other obligation (including any guarantee) that is contingent in
nature at such time; or

 

(iii)    an obligation to provide collateral to secure any of the foregoing
types of obligations.

 

(d)    Terms Generally.  The definitions of terms herein (including those
incorporated by reference to the UCC or to another document) apply equally to
the singular and plural forms of the terms defined. Whenever the context may
require, any pronoun includes the corresponding masculine, feminine and neuter
forms. The words “include”, “includes” and “including” shall be deemed to be
followed by the phrase “without limitation”. The word “will” shall be construed
to have the same meaning and effect as the word “shall”. Unless the context
requires otherwise, (a) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person’s successors and
assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Sections, Exhibits
and Schedules shall be construed to refer to Sections of, and Exhibits and
Schedules to, this Agreement and (e) the word “property” shall be construed to
refer to any and all tangible and intangible assets and properties, including
cash, securities, accounts and contract rights.

 

SECTION 2.  Grant of Transaction Liens.

 

(a)    The Lien Grantor, in order to secure the Secured Obligations, grants to
the Collateral Agent for the benefit of the Secured Parties a continuing
security interest in all the following property of the Lien Grantor, whether now
owned or existing or hereafter acquired or arising and regardless of where
located, subject to the exceptions set forth in Section 2(b):

 

(i)    all Inventory;

 

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(ii)    all Receivables;

 

(iii)    all Contracts;

 

(iv)    all Blocked Accounts and the Cash Collateral Account;

 

(v)    all books and records (including customer lists, credit files, computer
programs, printouts and other computer materials and records) of the Lien
Grantor pertaining to any of its Collateral; and

 

(vi)    all other Proceeds of the Collateral described in the foregoing clauses
(i) through (iv).

 

(b)    The Collateral shall not include Transferred Receivables and (i) rights
to payment and collections in respect of such Transferred Receivables, (ii)
security interests or Liens and property subject thereto purporting to secure or
guarantee payment of such Transferred Receivables, (iii) guarantees, letters of
credit, acceptances, insurance and other arrangements from time to time
supporting or securing payment of such Transferred Receivables, (iv) all
invoices, documents, books, records and other information with respect to such
Transferred Receivables or the obligors thereon, (v) with respect to any such
Transferred Receivables, the transferee’s interest in the product (including
returned product), the sale of which by such transferee gave rise to such
Transferred Receivables and (vi) all Proceeds of the items described in
subclauses 2(b)(i) through 2(b)(v) (preceding subclauses (b)(i) through (b)(vi),
collectively, the “Related Transferred Rights”).

 

(c)    With respect to each right to payment or performance included in the
Collateral from time to time, the Transaction Lien granted therein includes a
continuing security interest in all right, title and interest of the Lien
Grantor in and to (i) any Supporting Obligation that supports such payment or
performance and (ii) any Lien that (x) secures such right to payment or
performance or (y) secures any such Supporting Obligation.

 

(d)    The Transaction Liens are granted as security only and shall not subject
the Collateral Agent or any other Secured Party to, or transfer or in any way
affect or modify, any obligation or liability of the Lien Grantor with respect
to any of the Collateral or any transaction in connection therewith.

 

SECTION 3.  General Representations and Warranties.  The Lien Grantor represents
and warrants that:

 

(a)    The Lien Grantor is duly organized, validly existing and in good standing
under the laws of the jurisdiction identified as its jurisdiction of
organization in its Perfection Certificate.

 

(b)    The Lien Grantor has good and marketable title to all its Collateral
(subject to exceptions that are, in the aggregate, not material), free and clear
of any Lien other than Permitted Liens.

 

(c)    The Lien Grantor has not performed any acts that might prevent the
Collateral Agent from enforcing any of the provisions of the Security Documents
or that would limit the Collateral Agent in any such enforcement. No financing
statement, security agreement, mortgage or similar or equivalent document or
instrument covering all or part of the Collateral owned by such Lien Grantor is
on file or of record in any jurisdiction in which such filing or recording would
be effective to perfect or record a Lien on such Collateral, except (x)
financing statements with respect to the security agreement dated as of November
30, 2001 between the Borrower and the Collateral Agent and (y) financing
statements, mortgages or other similar or equivalent documents with respect to
Permitted Liens. After the Effective Date, no Collateral owned by such Lien
Grantor will be in the possession or under the control of any other Person
having a Lien thereon, other than a Permitted Lien.

 

(d)    The Transaction Liens on all Collateral owned by the Lien Grantor (i)
have been validly created, (ii) will attach to each item of such Collateral on
the Effective Date (or, if such Lien Grantor first obtains rights thereto on a
later date, on such later date) and (iii) when so attached, will secure all the
Secured Obligations.

 

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(e)    The Lien Grantor has delivered a Perfection Certificate to the Collateral
Agent. The information set forth therein is correct and complete as of the
Effective Date. After the Effective Date, the Collateral Agent or the
Administrative Agent may obtain, at the Lien Grantor’s expense, a file search
report from each UCC filing office listed in its Perfection Certificate, showing
the filing made at such filing office to perfect the Transaction Liens on the
Collateral.

 

(f)    The Transaction Liens constitute perfected security interests in the
Collateral owned by the Lien Grantor to the extent that a security interest
therein may be perfected by filing pursuant to the UCC, prior to all Liens and
rights of others therein except Permitted Liens. No registration, recordation or
filing with any governmental body, agency or official is required in connection
with the execution or delivery of the Security Documents or is necessary for the
validity or enforceability thereof or for the perfection of the Transaction
Liens pursuant to the UCC or for the enforcement of the Transaction Liens
pursuant to the UCC.

 

(g)    The Lien Grantor has taken, and will continue to take, all actions
necessary under the UCC to perfect its interest in any Receivables purchased or
otherwise acquired by it, as against its assignors and creditors of its
assignors.

 

(h)    The Lien Grantor’s Collateral is insured as required by the Credit
Agreement.

 

(i)    Any Inventory produced by the Lien Grantor has or will have been produced
in compliance with the applicable requirements of the Fair Labor Standards Act,
as amended.

 

(j)    The Existing Receivables SPV Accounts are all of the accounts owned by
Receivables SPV. Other than (i) the Existing Receivables SPV Accounts, (ii) the
Cash Collateral Account, and (iii) any Blocked Account, there are no accounts
owned by the Lien Grantor or Receivables SPV into which any collections or other
payments or proceeds in respect of Pledged Receivables may be deposited.

 

SECTION 4.  Further Assurances; General Covenants.  The Lien Grantor covenants
as follows:

 

(a)    The Lien Grantor will, from time to time, at its own expense, execute,
deliver, authorize, file and record any statement, assignment, instrument,
document, agreement or other paper and take any other action (including (x) any
filing of financing or continuation statements under the UCC, (y) at any time
when the Effective Date Receivables Financing shall have terminated and been
paid in full and not been replaced with another Receivables Financing on terms
satisfactory to the Administrative Agent, causing any lockbox, concentration or
similar account into which payments with respect to Receivables then owned by
the Lien Grantor will be received to be subjected to Blocked Account Agreements
and (z) at any time when the Effective Date Receivables Financing shall have
terminated and been replaced with another Receivables Financing on terms
satisfactory to the Administrative Agent, causing the appropriate parties to
such replacement Receivables Financing to execute an intercreditor agreement
that is substantially identical to the Intercreditor Agreement) that from time
to time may be reasonably necessary or desirable, or that the Collateral Agent
may reasonably request, in order to:

 

(i)    create, preserve, perfect, confirm or validate the Transaction Liens on
the Collateral;

 

(ii)    enable the Collateral Agent and the other Secured Parties to obtain the
full benefits of the Security Documents; or

 

(iii)    enable the Collateral Agent to exercise and enforce any of its rights,
powers and remedies with respect to any of the Collateral.

 

To the extent permitted by applicable law, the Lien Grantor authorizes the
Collateral Agent to execute and file such financing statements or continuation
statements without the Lien Grantor’s signature appearing thereon. The

 

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Collateral Agent agrees to provide the Lien Grantor with copies of any such
financing statements and continuation statements. The Lien Grantor agrees that a
carbon, photographic, photostatic or other reproduction of this Agreement or of
a financing statement is sufficient as a financing statement to the extent
permitted by law. The Lien Grantor constitutes the Collateral Agent its
attorney-in-fact to execute and file all filings required or so requested for
the foregoing purposes, all acts of such attorney being hereby ratified and
confirmed; and such power, being coupled with an interest, shall be irrevocable
until all the Transaction Liens granted by the Lien Grantor terminate pursuant
to Section 12. The Borrower will pay the costs of, or incidental to, any
recording or filing of any financing or continuation statements or other
documents recorded or filed pursuant hereto.

 

(b)    The Lien Grantor will not (i) change its name or structure as a
corporation, or (ii) change its location (determined as provided in UCC Section
9-307) unless it shall have given the Collateral Agent prior notice thereof and
delivered an Opinion of Counsel with respect thereto in accordance with Section
4(c).

 

(c)    At least 30 days before it takes any action contemplated by Section 4(b),
the Lien Grantor, at its own expense, will cause to be delivered to the
Collateral Agent an Opinion of Counsel, in form and substance reasonably
satisfactory to the Collateral Agent, to the effect that (i) all financing
statements and amendments or supplements thereto, continuation statements and
other documents required to be filed or recorded in order to perfect and protect
the Transaction Liens against all creditors of and purchasers from the Lien
Grantor after it takes such action (except any applicable continuation
statements specified in such Opinion of Counsel that are to be filed more than
six months after the date thereof) have been filed or recorded in each office
necessary for such purpose, (ii) all fees and taxes, if any, payable in
connection with such filings or recordations have been paid in full and (iii)
except as otherwise agreed by the Required Lenders, such action will not
adversely affect the perfection or priority of the Transaction Lien on any
Collateral to be owned by the Lien Grantor after it takes such action or the
accuracy of the Lien Grantor’s representations and warranties herein relating to
such Collateral.

 

(d)    The Lien Grantor will not sell, lease, exchange, assign or otherwise
dispose of, or grant any option with respect to, any of its Collateral; provided
that the Lien Grantor may do any of the foregoing unless (i) doing so would
breach a covenant in the Credit Agreement or (ii) an Event of Default shall have
occurred and be continuing and the Collateral Agent shall have notified the Lien
Grantor that its right to do so is terminated, suspended or otherwise limited.
Concurrently with any sale or other disposition (except a lease) permitted by
the foregoing proviso, the Transaction Liens on the assets sold or disposed of
(but not in any Proceeds arising from such sale or disposition) will cease
immediately without any action by the Collateral Agent or any other Secured
Party. The Collateral Agent will, at the Borrower’s expense, execute and deliver
to the Lien Grantor such documents as the Lien Grantor shall reasonably request
to evidence the fact that any asset so sold or disposed of is no longer subject
to a Transaction Lien.

 

(e)    The Lien Grantor will, promptly upon request, provide to the Collateral
Agent all information and evidence concerning the Collateral that the Collateral
Agent may reasonably request from time to time to enable it to enforce the
provisions of the Security Documents.

 

(f)    From time to time upon request by the Collateral Agent, the Lien Grantor
will, at its own expense, cause to be delivered to the Secured Parties an
Opinion of Counsel satisfactory to the Collateral Agent as to such matters
relating to the transactions contemplated hereby as the Collateral Agent may
reasonably request.

 

SECTION 5.  Cash Collateral Account.  (a) If and when required for purposes
hereof, the Collateral Agent will establish an account (the “Cash Collateral
Account”), in the name and under the exclusive control of the Collateral Agent,
into which all amounts owned by the Lien Grantor that are to be deposited
therein pursuant to the Loan Documents shall be deposited from time to time.

 

(b)    On or prior to the Effective Date (or such longer period as the Borrower,
the Collateral Agent and the Co-Collateral Agent may agree), the Lien Grantor
shall have caused Receivables SPV to have subjected all of its then existing
accounts (collectively, the “Existing Receivables SPV Accounts”) to Blocked
Account

 

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Agreements, each of which Blocked Account Agreements shall, to the extent the
account subject thereto is a “Lock-Box Account” or “Concentration Account” (each
as defined in the Receivables Purchase Agreement), (i) by its terms, first
become effective immediately upon receipt by the “Lockbox Box” or “Concentration
Account Bank” (each as defined in the Receivables Purchase Agreement) or other
depositary bank at which such account is maintained (the “Depositary Bank”) of
written notice from The Bank of Nova Scotia, as collateral agent under the
Effective Date Receivables Financing (the “Receivables Collateral Agent”),
specifying that the Effective Date Receivables Financing has terminated and all
monetary obligations in respect thereof have been satisfied in full and that the
blocked account agreement in effect with respect to such “Lockbox Account” or
“Concentration Account” (each as defined in the Receivables Purchase Agreement)
in connection with the Effective Date Receivables Financing shall be terminated
in accordance with its terms (or upon written notice from the Collateral Agent
to such effect, if (x) the Receivables Collateral Agent has failed to deliver
such notice within five Business Days of the date on which it is initially
obligated to do so pursuant to the Intercreditor Agreement, (y) the Collateral
Agent shall have delivered a Final Notification Request (as defined in the
Intercreditor Agreement), and (z) the Funding Agents (as defined in the
Intercreditor Agreement) have failed to comply, or to cause the Receivables
Collateral Agent to comply, with such Final Notification Request within three
Business Days of the date on which such Final Notification Request is effective
under the Intercreditor Agreement), (ii) by its terms, terminate upon receipt by
the Depositary Bank of written notice from the Collateral Agent to the effect
that the Effective Date Receivables Financing has been replaced with another
Receivables Financing on terms satisfactory to the Administrative Agent, such
that the accounts of Receivables SPV and the lockbox accounts of the Lien
Grantor may be subjected to blocked account agreements in connection with such
replacement Receivables Financing and (iii) expressly provide that its terms may
not be amended or modified without the consent of the Receivables Collateral
Agent.

 

(c)    If directed to do so by the Collateral Agent at any time during a Sweep
Period or when an Event of Default has occurred and is continuing, the Borrower
shall cause to be deposited in the account referred to in clause (d) below,
promptly upon receipt thereof, (i) all payments received in respect of the
Pledged Receivables and (ii) all other Proceeds of the Collateral.

 

(d)    On or prior to the Effective Date, the Borrower shall have caused to be
subjected to a Blocked Account Agreement any lockbox and any corresponding
deposit account, any concentration account and any account into which payments
from Receivables SPV to the Borrower in respect of the purchase price of
Transferred Receivables may be received.

 

(e)    Unless (x) a Sweep Period shall have occurred and be continuing, (y) an
Event of Default shall have occurred and be continuing and the Required Lenders
shall have instructed the Collateral Agent to stop withdrawing amounts from the
Cash Collateral Account pursuant to this subsection or (z) the maturity of the
Loans (or other Secured Obligations) shall have been accelerated pursuant to
Article 7 of the Credit Agreement (or otherwise), the Collateral Agent shall
withdraw amounts from the Cash Collateral Account (other than amounts required
to be deposited in the Cash Collateral Account pursuant to Section 2.10(b) or
Section 5.12(b) of the Credit Agreement) and remit such amounts to, or as
directed by, the Borrower from time to time.

 

(f)    If an Event of Default shall have occurred and be continuing, the
Collateral Agent may (i) retain all cash and investments then held in the Cash
Collateral Account, (ii) liquidate any or all investments held therein and/or
(iii) withdraw any amounts held therein and apply such amounts as provided in
Section 7. Additionally, and without limiting the generality of the foregoing,
during any Sweep Period (i) all amounts held in the Cash Collateral Account
(other than amounts deposited therein pursuant to Section 2.05(j), Section
2.10(b) or Section 5.12(b) of the Credit Agreement as cash collateral for the LC
Exposure) shall be applied on a daily basis to the outstanding principal balance
of the Base Rate Loans or, if applicable, as provided in Section 7 and (ii)
following repayment in full of all outstanding Base Rate Loans pursuant to
clause (i), any remaining amounts held in the Cash Collateral Account shall
continue to be held in the Cash Collateral Account and (other than amounts
deposited therein pursuant to Section 2.05(j), Section 2.10(b) or Section
5.12(b) of the Credit Agreement as cash collateral for the LC Exposure) shall be
applied to the outstanding principal balance of maturing Eurodollar Loans upon
expiration of the Interest Periods applicable thereto.

 

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(g)    Funds held in the Cash Collateral Account may, until withdrawn or
otherwise applied pursuant hereto, be invested and reinvested in such Liquid
Investments as the Borrower shall request from time to time; provided that, if
an Event of Default shall have occurred and be continuing, the Collateral Agent
may select such Liquid Investments.

 

(h)    If immediately available cash on deposit in the Cash Collateral Account
is not sufficient to make any distribution or withdrawal to be made pursuant
hereto, the Collateral Agent will cause to be liquidated, as promptly as
practicable, such investments held in or credited to the Cash Collateral Account
as shall be required to obtain sufficient cash to make such distribution or
withdrawal and, notwithstanding any other provision hereof, such distribution or
withdrawal shall not be made until such liquidation has taken place.

 

SECTION 6.  Remedies upon Event of Default.  (a) If an Event of Default shall
have occurred and be continuing, the Collateral Agent may exercise (or cause its
sub-agents to exercise) any or all of the remedies available to it (or to such
sub-agents) under the Security Documents.

 

(b)    Without limiting the generality of the foregoing, if an Event of Default
shall have occurred and be continuing, the Collateral Agent may exercise on
behalf of the Secured Parties all the rights of a secured party under the UCC
(whether or not in effect in the jurisdiction where such rights are exercised)
with respect to any Collateral and, in addition, the Collateral Agent may,
without being required to give any notice, except as herein provided or as may
be required by mandatory provisions of law, withdraw all cash held in the Cash
Collateral Account and apply such cash as provided in Section 7 and, if there
shall be no such cash or if such cash shall be insufficient to pay all the
Secured Obligations in full, sell, lease, license or otherwise dispose of the
Collateral or any part thereof. Notice of any such sale or other disposition
shall be given to the Lien Grantor as required by Section 9.

 

(c)    Without limiting the generality of the foregoing, during any Sweep
Period, the Collateral Agent may (i) exercise all of the remedies described in
Section 5(f) and (ii) cause all amounts constituting Collateral that are held in
any lockbox, concentration or other account of the Lien Grantor then subject to
an effective Blocked Account Agreement (it being understood that any Blocked
Account Agreement with respect to an account that is a “Lockbox Account” or
“Concentration Account” (each as defined in the Receivables Purchase Agreement)
shall only become effective in accordance with Section 5(b)(i)) to be
transferred on a daily basis to the Cash Collateral Account.

 

SECTION 7.  Application of Proceeds.  (a) If an Event of Default shall have
occurred and be continuing, the Collateral Agent may apply (i) any cash held in
the Cash Collateral Account and (ii) the proceeds of any sale or other
disposition of all or any part of the Collateral, in the following order of
priorities:

 

first, to pay the expenses of such sale or other disposition, including
reasonable compensation to agents of and counsel for the Collateral Agent, and
all expenses, liabilities and advances incurred or made by the Collateral Agent
in connection with the Security Documents, and any other amounts then due and
payable to the Collateral Agent pursuant to Section 8 or to any Agent pursuant
to the Credit Agreement;

 

second, to pay the unpaid principal of the Secured Obligations (other than
Second Secured Derivative Obligations) ratably (or to provide for the payment
thereof pursuant to Section 7(b)), until payment in full of the principal of all
such Secured Obligations (other than Second Secured Derivative Obligations shall
have been made (or so provided for);

 

third, to pay ratably all interest (including Post-Petition Interest) on the
Secured Obligations (other than Secured Derivative Obligations) and all
commitment and other fees payable under the Related Documents, until payment in
full of all such interest and fees shall have been made;

 

fourth, to pay all other Secured Obligations (other than Secured Derivative
Obligations) ratably (or to provide for the payment thereof pursuant to Section
7(b)), until payment in full of all such other Secured Obligations (other than
Secured Derivative Obligations) shall have been made (or so provided for);

 

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fifth, to pay ratably the unpaid principal of the Second Secured Derivative
Obligations (or to provide payment therefor pursuant to Section 7(b)) until
payment in full of the principal of all Second Secured Derivative Obligations
shall have been made (or so provided for);

 

sixth, to pay ratably the all interest (including Post-Petition Interest) on the
Secured Derivative Obligations, until payment in full of all such interest has
been made; and

 

finally, to pay to the Lien Grantor, or as a court of competent jurisdiction may
direct, any surplus then remaining from the proceeds of the Collateral owned by
it.

 

The Collateral Agent may make such distributions hereunder in cash or in kind
or, on a ratable basis, in any combination thereof.

 

Notwithstanding anything to the contrary herein, the parties hereto agree that
the unpaid principal (i.e., the Mark-to-Market Value) of the First Secured
Derivative Obligations shall be paid, ratably with the unpaid principal of other
Secured Obligations (other than Second Secured Derivative Obligations), pursuant
to clause second above; provided that if on the date of any application of cash
or proceeds in accordance with this Section 7(a), the aggregate Mark-to-Market
Value of First Secured Derivative Obligations exceeds an amount equal to the
difference of $75,000,000 less the aggregate Mark-to-Market Value of First
Secured Derivative Obligations previously paid pursuant to this Section 7(a)
(such difference, the “Available Derivative Amount” at such date), then: (x) the
Secured Obligations payable pursuant to clause second above shall the
Mark-to-Market Value of First Secured Derivative Obligations in an aggregate
amount equal to the Available Derivative Amount at such date (which Available
Derivative Amount shall represent and be comprised of a ratable portion (the
“Permitted Ratable Portion”) of the Mark-to-Market Value of each First Secured
Derivative Obligation), and (y) the portion of the Mark-to-Market Value of each
First Secured Derivative Obligation that is in excess of the Permitted Ratable
Portion referred to in clause (x) above (and is therefore not paid ratably with
the unpaid principal of Secured Obligations pursuant to clause second above)
shall, for all purposes of this Section 7(a), be treated as and deemed to be
unpaid principal of a Second Secured Derivative Obligation, and shall be paid,
ratably with the unpaid principal of all other Second Secured Derivative
Obligations, pursuant to clause fifth above.

 

(b)    If at any time any portion of any monies collected or received by the
Collateral Agent would, but for the provisions of this Section 7(b), be payable
pursuant to Section 7(a) in respect of an Unliquidated Secured Obligation, the
Collateral Agent shall not apply any monies to pay such Unliquidated Secured
Obligation but instead shall request the holder thereof, at least 10 days before
each proposed distribution hereunder, to notify the Collateral Agent as to the
maximum amount of such Unliquidated Secured Obligation if then ascertainable
(e.g., in the case of a letter of credit, the maximum amount available for
subsequent drawings thereunder). If the holder of such Unliquidated Secured
Obligation does not notify the Collateral Agent of the maximum ascertainable
amount thereof at least two Domestic Business Days before such distribution,
such Unliquidated Secured Obligation will not be entitled to share in such
distribution. If such holder does so notify the Collateral Agent as to the
maximum ascertainable amount thereof, the Collateral Agent will allocate to such
holder a portion of the monies to be distributed in such distribution,
calculated as if such Unliquidated Secured Obligation were outstanding in such
maximum ascertainable amount. However, the Collateral Agent will not apply such
portion of such monies to pay such Unliquidated Secured Obligation, but instead
will hold such monies or invest such monies in Liquid Investments. All such
monies and Liquid Investments and all proceeds thereof will constitute
Collateral hereunder, but will be subject to distribution in accordance with
this Section 7(b) rather than Section 7(a). The Collateral Agent will hold all
such monies and Liquid Investments and the net proceeds thereof in trust until
all or part of such Unliquidated Secured Obligation becomes a Liquidated Secured
Obligation, whereupon the Collateral Agent at the request of the relevant
Secured Party will apply the amount so held in trust to pay such Liquidated
Secured Obligation; provided that, if the other Secured Obligations theretofore
paid pursuant to the same clause of Section 7(a) (i.e., clause second, fourth or
fifth) were not paid in full, the Collateral Agent will apply the amount so held
in trust to pay the same percentage of such Liquidated Secured Obligation as the

 

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percentage of such other Secured Obligations theretofore paid pursuant to the
same clause of Section 7(a). If (i) the holder of such Unliquidated Secured
Obligation shall advise the Collateral Agent that no portion thereof remains in
the category of an Unliquidated Secured Obligation and (ii) the Collateral Agent
still holds any amount held in trust pursuant to this Section 7(b) in respect of
such Unliquidated Secured Obligation (after paying all amounts payable pursuant
to the preceding sentence with respect to any portions thereof that became
Liquidated Secured Obligations), such remaining amount will be applied by the
Collateral Agent in the order of priorities set forth in Section 7(a).

 

(c)    In making the payments and allocations required by this Section, the
Collateral Agent may rely upon information supplied to it pursuant to Section
11(g). All distributions made by the Collateral Agent pursuant to this Section
shall be final (except in the event of manifest error) and the Collateral Agent
shall have no duty to inquire as to the application by any Secured Party of any
amount distributed to it.

 

SECTION 8.  Fees and Expenses; Indemnification.  (a) The Lien Grantor will
forthwith upon demand pay to the Collateral Agent:

 

(i)    the amount of any taxes that the Collateral Agent may have been required
to pay by reason of the Transaction Liens or to free any Collateral from any
other Lien thereon;

 

(ii)    the amount of any and all reasonable out-of-pocket expenses, including
transfer taxes and reasonable fees and expenses of counsel and other experts,
that the Collateral Agent may incur in connection with (x) the administration or
enforcement of the Security Documents, including such expenses as are incurred
to preserve the value of the Collateral or the validity, perfection, rank or
value of any Transaction Lien, (y) the collection, sale or other disposition of
any Collateral or (z) the exercise by the Collateral Agent of any of its rights
or powers under the Security Documents;

 

(iii)    the amount of any fees that the Lien Grantor shall have agreed in
writing to pay to the Collateral Agent and that shall have become due and
payable in accordance with such written agreement; and

 

(iv)    the amount required to indemnify the Collateral Agent for, or hold it
harmless and defend it against, any loss, liability or expense (including the
reasonable fees and expenses of its counsel and any experts or sub-agents
appointed by it hereunder) incurred or suffered by the Collateral Agent in
connection with the Security Documents, except to the extent that such loss,
liability or expense arises from the Collateral Agent’s gross negligence or
willful misconduct or a breach of any duty that the Collateral Agent has under
this Agreement (after giving effect to Sections 10 and 11).

 

Any such amount not paid to the Collateral Agent on demand will bear interest
for each day thereafter until paid at a rate per annum equal to the sum of 2.00%
plus the Alternate Base Rate for such day plus the Applicable Rate that would,
in the absence of an Event of Default, be applicable to the Base Rate Loans for
such day.

 

(b)    If any transfer tax, documentary stamp tax or other tax is payable in
connection with any transfer or other transaction provided for in the Security
Documents, the Lien Grantor will pay such tax and provide any required tax
stamps to the Collateral Agent or as otherwise required by law.

 

SECTION 9.  Authority to Administer Collateral.  The Lien Grantor irrevocably
appoints the Collateral Agent its true and lawful attorney, with full power of
substitution, in the name of the Lien Grantor, any Secured Party or otherwise,
for the sole use and benefit of the Secured Parties, but at the Lien Grantor’s
expense, to the extent permitted by law to exercise, at any time and from time
to time while an Event of Default shall have occurred and be continuing, all or
any of the following powers with respect to all or any of the Collateral (to the
extent necessary to pay the Secured Obligations in full):

 

(a)    to demand, sue for, collect, receive and give acquittance for any and all
monies due or to become due upon or by virtue thereof,

 

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(b)    to settle, compromise, compound, prosecute or defend any action or
proceeding with respect thereto,

 

(c)    to sell, lease, license or otherwise dispose of the same or the proceeds
or avails thereof, as fully and effectually as if the Collateral Agent were the
absolute owner thereof, and

 

(d)    to extend the time of payment of any or all thereof and to make any
allowance or other adjustment with reference thereto;

 

provided that, except in the case of Collateral that is perishable or threatens
to decline speedily in value or is of a type customarily sold on a recognized
market, the Collateral Agent will give the Lien Grantor at least ten days’ prior
written notice of the time and place of any public sale thereof or the time
after which any private sale or other intended disposition thereof will be made.
Any such notice shall (i) contain the information specified in UCC Section
9-613, (ii) be Authenticated and (iii) be sent to the parties required to be
notified pursuant to UCC Section 9-611(c); provided that, if the Collateral
Agent fails to comply with this sentence in any respect, its liability for such
failure shall be limited to the liability (if any) imposed on it as a matter of
law under the UCC.

 

SECTION 10.  Limitation on Duty in Respect of Collateral.  Beyond the exercise
of reasonable care in the custody and preservation thereof, the Collateral Agent
will have no duty as to any Collateral in its possession or control or in the
possession or control of any sub-agent or bailee or any income therefrom or as
to the preservation of rights against prior parties or any other rights
pertaining thereto. The Collateral Agent will be deemed to have exercised
reasonable care in the custody and preservation of the Collateral in its
possession or control if such Collateral is accorded treatment substantially
equal to that which it accords its own property, and will not be liable or
responsible for any loss or damage to any Collateral, or for any diminution in
the value thereof, by reason of any act or omission of any sub-agent or bailee
selected by the Collateral Agent in good faith or by reason of any act or
omission by the Collateral Agent pursuant to instructions from the
Administrative Agent, except to the extent that such liability arises from the
Collateral Agent’s gross negligence or willful misconduct.

 

SECTION 11.  General Provisions Concerning the Collateral Agent.  (a)
Authority.  The Collateral Agent is authorized to take such actions and to
exercise such powers as are delegated to the Collateral Agent by the terms of
the Security Documents, together with such actions and powers as are reasonably
incidental thereto.

 

(b)    Coordination with Secured Parties.  To the extent requested to do so by
any Secured Party, the Collateral Agent will promptly notify such Secured Party
of each notice or other communication received by the Collateral Agent hereunder
and/or deliver a copy thereof to such Secured Party. As to any matters not
expressly provided for herein (including (i) the timing and methods of
realization upon the Collateral and (ii) the exercise of any power that the
Collateral Agent may, but is not expressly required to, exercise under any
Security Document), the Collateral Agent shall act or refrain from acting in
accordance with written instructions from the Required Lenders or, in the
absence of such instructions, in accordance with its discretion (subject to the
following provisions of this Section).

 

(c)    Rights and Powers as a Secured Party.  The Person serving as the
Collateral Agent shall, in its capacity as a Secured Party, have the same rights
and powers as any other Secured Party and may exercise the same as though it
were not the Collateral Agent. Such Person and its Affiliates may accept
deposits from, lend money to and generally engage in any kind of business with
the Borrower, any of its Subsidiaries or their respective Affiliates as if it
were not the Collateral Agent hereunder.

 

(d)    Limited Duties and Responsibilities.  The Collateral Agent shall not have
any duties or obligations under the Security Documents except those expressly
set forth therein. Without limiting the generality of the foregoing, (a) the
Collateral Agent shall not be subject to any fiduciary or other implied duties,
regardless of whether an Event of Default has occurred and is continuing, (b)
the Collateral Agent shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers

 

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expressly contemplated by the Security Documents that the Collateral Agent is
required in writing to exercise by the Required Lenders, and (c) except as
expressly set forth in the Security Documents, the Collateral Agent shall not
have any duty to disclose, and shall not be liable for any failure to disclose,
any information relating to the Borrower or any of its Subsidiaries that is
communicated to or obtained by the bank serving as Collateral Agent or any of
its Affiliates in any capacity. The Collateral Agent shall not be liable for any
action taken or not taken by it with the consent or at the request of the
Required Lenders (or such other number or percentage of the Lenders as shall be
necessary under the circumstances as provided in Section 9.02 of the Credit
Agreement) or in the absence of its own gross negligence or willful misconduct.
The Collateral Agent shall not be responsible for the existence, genuineness or
value of any Collateral or for the validity, perfection, priority or
enforceability of any Transaction Lien, whether impaired by operation of law or
by reason of any action or omission to act on its part under the Security
Documents. The Collateral Agent shall be deemed not to have knowledge of any
Event of Default unless and until written notice thereof is given to the
Collateral Agent by the Borrower or a Secured Party, and the Collateral Agent
shall not be responsible for or have any duty to ascertain or inquire into (i)
any statement, warranty or representation made in or in connection with any
Security Document, (ii) the contents of any certificate, report or other
document delivered thereunder or in connection therewith, (iii) the performance
or observance of any of the covenants, agreements or other terms or conditions
set forth in any Security Document, (iv) the validity, enforceability,
effectiveness or genuineness of any Security Document or any other agreement,
instrument or document, or (v) the satisfaction of any condition set forth in
any Security Document.

 

(e)    Authority to Rely on Certain Writings, Statements and Advice.  The
Collateral Agent shall be entitled to rely on, and shall not incur any liability
for relying on, any notice, request, certificate, consent, statement,
instrument, document or other writing believed by it to be genuine and to have
been signed or sent by the proper Person. The Collateral Agent also may rely on
any statement made to it orally or by telephone and believed by it to be made by
the proper Person, and shall not incur any liability for relying thereon. The
Collateral Agent may consult with legal counsel (who may be counsel for the
Borrower or any of its Subsidiaries), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountant or expert. The
Collateral Agent may rely conclusively on advice from the Administrative Agent
as to whether at any time (i) an Event of Default under the Credit Agreement has
occurred and is continuing, (ii) the maturity of the Loans has been accelerated
or (iii) any proposed action is permitted or required by the Credit Agreement.

 

(f)    Sub-Agents and Related Parties.  The Collateral Agent may perform any of
its duties and exercise any of its rights and powers through one or more
sub-agents appointed by it. The Collateral Agent and any such sub-agent may
perform any of its duties and exercise any of its rights and powers through its
Related Parties. The exculpatory provisions of Section 10 and this Section shall
apply to any such sub-agent and to the Related Parties of the Collateral Agent
and any such sub-agent.

 

(g)    Information as to Secured Obligations and Actions by Secured
Parties.  For all purposes of the Security Documents, including determining the
amounts of the Secured Obligations and whether a Secured Obligation is an
Unliquidated Secured Obligation or not, or whether any action has been taken
under any Secured Agreement, the Collateral Agent will be entitled to rely on
information from (i) the Administrative Agent for information as to the Lenders,
the Administrative Agent or the Collateral Agent, their Secured Obligations and
actions taken by them, (ii) any Secured Party for information as to its Secured
Obligations and actions taken by it, to the extent that the Collateral Agent has
not obtained such information from the foregoing sources, and (iii) the
Borrower, to the extent that the Collateral Agent has not obtained information
from the foregoing sources.

 

(h)    Within two Business Days after it receives or sends any notice referred
to in this subsection, the Collateral Agent shall send to the Administrative
Agent and each Secured Party requesting notice thereof, copies of any notice
given by the Collateral Agent to the Lien Grantor, or received by it from the
Lien Grantor, pursuant to Section 6, 7, 9, 11(j) or 12; provided that such
Secured Party has, at least five Domestic Business Days prior thereto, delivered
to the Collateral Agent a written notice (i) stating that it holds one or more
Secured Obligations and wishes to receive copies of such notices and (ii)
setting forth its address, facsimile number and e-mail address to which copies
of such notices should be sent.

 

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(i)    The Collateral Agent may refuse to act on any notice, consent, direction
or instruction from the Administrative Agent or any Secured Parties or any
agent, trustee or similar representative thereof that, in the Collateral Agent’s
opinion, (i) is contrary to law or the provisions of any Security Document, (ii)
may expose the Collateral Agent to liability (unless the Collateral Agent shall
have been indemnified, to its reasonable satisfaction, for such liability by the
Secured Parties that gave, or instructed the Agent to give, such notice,
consent, direction or instruction) or (iii) is unduly prejudicial to Secured
Parties not joining in such notice, consent, direction or instruction.

 

(j)    Resignation; Successor Collateral Agent.  Subject to the appointment and
acceptance of a successor Collateral Agent as provided in this subsection, the
Collateral Agent may resign at any time by notifying the Secured Parties and the
Borrower. Upon any such resignation, the Required Lenders shall have the right,
in consultation with the Lien Grantor, to appoint a successor Collateral Agent.
If no successor shall have been so appointed by the Required Lenders and shall
have accepted such appointment within 30 days after the retiring Collateral
Agent gives notice of its resignation, then the retiring Collateral Agent may,
on behalf of the Secured Parties, appoint a successor Collateral Agent which
shall be a bank with an office in the United States, or an Affiliate of any such
bank. Upon acceptance of its appointment as Collateral Agent hereunder by a
successor, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Collateral Agent
hereunder, and the retiring Collateral Agent shall be discharged from its duties
and obligations hereunder. The fees payable by the Lien Grantor to a successor
Collateral Agent shall be the same as those payable to its predecessor unless
otherwise agreed by the Lien Grantor and such successor. After the Collateral
Agent’s resignation hereunder, the provisions of this Section and Section 10
shall continue in effect for the benefit of such retiring Collateral Agent, its
sub-agents and their respective Related Parties in respect of any actions taken
or omitted to be taken by any of them while the retiring Collateral Agent was
acting as Collateral Agent.

 

SECTION 12.  Termination of Transaction Liens; Release of Collateral.

 

(a)    The Transaction Liens shall terminate when all the Release Conditions are
satisfied.

 

(b)    The Transaction Liens (x) with respect to any Pledged Receivables shall
terminate when such Receivables have become Transferred Receivables and (y) with
respect to any other Collateral shall terminate upon the sale of such Collateral
to a Person other than the Lien Grantor in a transaction not prohibited by the
Credit Agreement. In each case, such termination shall not require the consent
of any Secured Party, and the Collateral Agent and any third party shall be
fully protected in relying on a certificate of the Lien Grantor as to whether
any Pledged Receivables qualify as Transferred Receivables (including without
limitation whether the transfer thereof is permitted under the Credit Agreement
and this Agreement).

 

(c)    In the case of any Pledged Receivables, the Transaction Liens with
respect to the Related Transferred Rights shall terminate when such Pledged
Receivables become Transferred Receivables. Such termination shall not require
the consent of any Secured Party. If the Borrower delivers a certificate
pursuant to Section 12(b) stating that any Pledged Receivables qualify as
Transferred Receivables, the Collateral Agent and any third party shall be fully
protected in relying on such certificate as conclusive proof that the Related
Transferred Rights are not Collateral.

 

(d)    At any time before the Transaction Liens terminate, the Collateral Agent
may, at the written request of the Lien Grantor (and subject to clause (e)
below), (i) release any Collateral (but not all or any substantial portion of
the Collateral) with the prior written consent of the Required Lenders or (ii)
release any substantial portion of the Collateral with the prior written consent
of all the Lenders. For purposes hereof, a release of Collateral comprising 10%
or more of the Borrowing Base in effect on the date of such release shall
constitute release of a substantial portion of the Collateral.

 

(e)    Notwithstanding anything to the contrary herein, at the written request
of the Lien Grantor, the Collateral Agent may elect to release any portion (but
not all or substantially all) of the Collateral without the

 

15

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consent of any Lender, so long as (i) the Co-Collateral Agent has consented in
writing to such release, and (ii) immediately before and after giving pro forma
effect to any such release, (x) the aggregate amount of the Collateral
(calculated on a book value basis) released from and after the Effective Date in
reliance on this Section 12(e) would not exceed $150,000,000 and (y) Average
Facility Availability would be equal to or greater than $300,000,000.

 

(f)    Upon any termination of a Transaction Lien or release of Collateral, the
Collateral Agent will, at the expense of the Lien Grantor, execute and deliver
to the Lien Grantor such documents as the Lien Grantor shall reasonably request
to evidence the termination of such Transaction Lien or the release of such
Collateral, as the case may be.

 

SECTION 13.  Notices.  Except in the case of notices and other communications
expressly permitted to be given by telephone, each notice, request or other
communication given to any party hereunder shall be in writing delivered by hand
or overnight courier service, mailed by certified or registered mail or sent by
telecopy (or, in the case of any notice to a Secured Party pursuant to Section
11(b) or Section 11(h), transmitted by e-mail), as follows:

 

(a)    in the case of the Lien Grantor:

 

United States Steel Corporation

600 Grant Street

Room 1325

Pittsburgh, PA 15219

Attention: Treasurer

Facsimile: (412) 433-1167

E-mail: ltbrockway@uss.com

 

(b)    in the case of the Collateral Agent:

 

J.P. Morgan Chase Bank

Mining and Metals Group

270 Park Avenue

New York, NY 10017

Attention: Carlos Morales

Facsimile: (212) 270-4724

E-mail: carlos.morales@chase.com

 

and with a copy to:

 

J.P. Morgan Chase Bank

270 Park Avenue

20th Floor

New York, NY 10017

Attention: Jason Chang

Facsimile: (212) 270-7449

E-mail: jason.change@jpmorgan.com

 

with a copy to the Co-Collateral Agent:

 

General Electric Capital Corporation

500 West Monroe Street

12th Floor

Chicago, IL 60661

Attention: Account Manager - United States Steel

Facsimile: (312) 463-3840

 

16

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(c)    in the case of any Lender, to the Collateral Agent to be forwarded to
such Lender at its address or facsimile number specified in or pursuant to
Section 9.01 of the Credit Agreement; or

 

(d)    in the case of any Secured Party requesting notice under Section 11(h),
such address, facsimile number or e-mail address as such party may hereafter
specify for the purpose by notice to the Collateral Agent.

 

All notices and other communications given to any party hereto in accordance
with the terms of this Agreement shall be deemed to have been given on the date
of receipt. Any party may change its address, facsimile number and/or e-mail
address for purposes of this Section by giving notice of such change to the
Collateral Agent and the Lien Grantor in the manner specified above.

 

SECTION 14.  No Implied Waivers; Remedies Not Exclusive.  No failure by the
Collateral Agent or any Secured Party to exercise, and no delay in exercising
and no course of dealing with respect to, any right or remedy under any Related
Document shall operate as a waiver thereof; nor shall any single or partial
exercise by the Collateral Agent or any Secured Party of any right or remedy
under any Related Document preclude any other or further exercise thereof or the
exercise of any other right or remedy. The rights and remedies specified in the
Related Documents are cumulative and are not exclusive of any other rights or
remedies provided by law.

 

SECTION 15.  Successors and Assigns.  This Agreement is for the benefit of the
Collateral Agent and the Secured Parties. If all or any part of any Secured
Party’s interest in any Secured Obligation is assigned or otherwise transferred,
the transferor’s rights hereunder, to the extent applicable to the obligation so
transferred, shall be automatically transferred with such obligation. This
Agreement shall be binding on the Lien Grantor and its successors and assigns.

 

SECTION 16.  Amendments and Waivers.  Neither this Agreement nor any provision
hereof may be waived, amended, modified or terminated except pursuant to an
agreement or agreements in writing entered into by the parties hereto, with the
consent of such Lenders and/or Agents as are required to consent thereto under
Section 9.02(b) of the Credit Agreement.

 

SECTION 17.  Choice of Law.  This Agreement shall be construed in accordance
with and governed by the laws of the State of New York, except as otherwise
required by mandatory provisions of law and except to the extent that remedies
provided by the laws of any jurisdiction other than the State of New York are
governed by the laws of such jurisdiction.

 

SECTION 18.  Waiver of Jury Trial.  EACH PARTY HERETO WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO ANY
SECURITY DOCUMENT OR ANY TRANSACTION CONTEMPLATED THEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

SECTION 19.  Severability.  If any provision of any Security Document is invalid
or unenforceable in any jurisdiction, then, to the fullest extent permitted by
law, (i) the other provisions of the Security Documents shall remain in full
force and effect in such jurisdiction and shall be liberally construed in favor
of the Collateral Agent and the Secured Parties in order to carry out the
intentions of the parties thereto as nearly as may be possible and (ii) the
invalidity or unenforceability of such provision in such jurisdiction shall not
affect the validity or enforceability thereof in any other jurisdiction.

 

17

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SECTION 20.  Additional Secured Obligations.  (a) Subject to the requirements
set forth in clauses (b) and (c) of this Section 20, the Borrower from time to
time may designate any Derivative Obligation as a “Secured Derivative
Obligation” for purposes hereof by delivering to the Collateral Agent a
certificate signed by a Financial Officer (an “Additional Secured Obligation
Certificate”) that (i) identifies such Derivative Obligation and the related
Derivative Contract (including the name and address of the counterparty thereto,
the notional principal amount thereof and the expiration date thereof), (ii)
states that such Derivative Obligation has been entered into in the course of
the ordinary business practice of the Borrower and not for speculative purposes,
(iii) specifies, as of the date such Derivative Obligation is entered into (and
after giving effect to its designation as a First Secured Derivative Obligation
or Second Secured Derivative Obligation hereunder, as the case may be), the
aggregate Mark-to-Market Value of all Secured Derivative Obligations then
currently designated as “First Secured Derivative Obligations” pursuant to this
Section 20, and (iv) specifies (subject to the requirements of clause (c) below)
whether such Derivative Obligation will be designated as a First Secured
Derivative Obligation or a Second Secured Derivative Obligation hereunder.

 

(b)    Notwithstanding anything to the contrary herein, no Derivative Obligation
shall be designated as a “Secured Derivative Obligation” hereunder unless (and
the Borrower shall certify in the relevant Additional Secured Obligation
Certificate that): (i) at or prior to the time the relevant Derivative Contract
was executed, the Borrower and the Lender or Lender Affiliate party thereto
expressly agreed in writing that such Derivative Obligation would constitute a
“Secured Derivative Obligation” entitled to the benefits of the Security
Documents and (ii) the Lender or Lender Affiliate party thereto shall have
delivered a notice to the Collateral Agent (or, in the case of a Lender
Affiliate, an instrument in form and substance satisfactory to the Collateral
Agent) to the effect set forth in subclause (i) of this clause (b), and
acknowledging and agreeing to be bound by the terms of this Agreement with
respect to such Derivative Obligation.

 

(c)    Notwithstanding anything to the contrary herein, no Secured Derivative
Obligation shall be designated as a First Secured Derivative Obligation
hereunder unless (and the Borrower shall certify in the relevant Additional
Secured Obligation Certificate that): (i) as of the date such Derivative
Obligation is entered into (and after giving effect to its designation as a
First Secured Derivative Obligation), the aggregate Mark-to-Market Value of all
Secured Derivative Obligations then currently designated as First Secured
Derivative Obligations shall not exceed $75,000,000, and (ii) at or prior to the
time the relevant Derivative Contract was executed, the Borrower and the Lender
or Lender Affiliate party thereto expressly agreed in writing that such
Derivative Obligation would be designated as a First Secured Derivative
Obligation entitled to the benefits of the Security Documents.

 

18

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.

 

   

UNITED STATES STEEL CORPORATION

By:    

 

  /s/ Larry. T. Brockway

--------------------------------------------------------------------------------

   

Name:

 

Larry T. Brockway

   

Title:

 

Vice President & Treasurer

 

19

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JPMORGAN CHASE BANK,
as Collateral Agent

By:    

 

  /s/ James H. Ramage

--------------------------------------------------------------------------------

   

Name:

 

James H. Ramage

   

Title:

 

Managing Director

 

20

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EXHIBIT A

to Security Agreement

 

PERFECTION CERTIFICATE

 

The undersigned is a duly authorized officer of United States Steel Corporation
(the “Lien Grantor”). With reference to the Amended and Restated Security
Agreement dated as of May 20, 2003 and amended and restated as of October 22,
2004 between the Lien Grantor and JPMorgan Chase Bank, as Collateral Agent
(terms defined therein being used herein as therein defined), the undersigned
certifies to the Collateral Agent and each other Secured Party as follows:

 

A. Information Required for Filings and Searches for Prior Filings.

 

1.    Jurisdiction of Organization.  The Lien Grantor is a corporation organized
under the laws of Delaware.

 

2.    Name.  The exact name of the Lien Grantor as it appears in its certificate
of incorporation is as follows: United States Steel Corporation

 

3.    Prior Names.  (a) Set forth below is each other corporate (or other
organizational) name that the Lien Grantor has had since its organization,
together with the date of the relevant change:

 

(b)    Except as set forth below, the Lien Grantor has not changed its structure
as a corporation.1

 

4.    Filing Office.  In order to perfect the Transaction Liens granted by the
Lien Grantor, a financing statement on Form UCC-1, with the collateral described
as set forth on Schedule I hereto, should be on file in the office of
                 in                 .2

 

B. Additional Information Required for Searches for Prior Filings under old
Article 9.

 

1.    Current Locations.  (a) The chief executive office of the Lien Grantor is
located at the following address:

 

Mailing Address

--------------------------------------------------------------------------------

   County                            

--------------------------------------------------------------------------------

   State                            

--------------------------------------------------------------------------------

 

The Lien Grantor [does] [does not] have a place of business in another county of
the State listed above.

 

(b)    The following are all locations not identified above or in paragraph (c)
below where the Lien Grantor maintains any Inventory:

 

Mailing Address

--------------------------------------------------------------------------------

   County                            

--------------------------------------------------------------------------------

   State                            

--------------------------------------------------------------------------------

 

(c)    The following are the names and addresses of all Persons (other than the
Lien Grantor) that have possession of any of the Lien Grantor’s Inventory:

 

Mailing Address

--------------------------------------------------------------------------------

   County                            

--------------------------------------------------------------------------------

   State                            

--------------------------------------------------------------------------------

           

 

--------------------------------------------------------------------------------

1Changes in corporate structure would include mergers and consolidations, as
well as any change in the Lien Grantor’s form of organization. If any such
change has occurred, include in Schedule II the information required by Part A
of this certificate as to each constituent party to a merger or consolidation
and any other predecessor organization.

 

2Insert Lien Grantor’s “location” determined as provided in UCC Section 9-307.

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, I have hereunto set my hand this      day of
                    ,             .

 

 

--------------------------------------------------------------------------------

Name:

Title:

 

A-2

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Schedule I

to Perfection Certificate

 

DESCRIPTION OF COLLATERAL

 

All Inventory, Receivables, Contracts, Blocked Accounts and the Cash Collateral
Account and all books and records (including customer lists, credit files,
computer programs, printouts and other computer material and records) pertaining
to the foregoing, in each case whether now owned or hereafter acquired and
wherever located, and all proceeds thereof, but excluding all Transferred
Receivables and Related Transferred Rights (as each such term is defined on
Exhibit A attached hereto).*

 

*Form of Exhibit A to UCC-1 Financing Statements is attached hereto.

 

    -1

--------------------------------------------------------------------------------

Exhibit A to UCC-1 Financing Statement

 

Debtor:

   Secured Party:

United States Steel Corporation

  

JPMorgan Chase Bank, as

600 Grant Street

  

Collateral Agent

Pittsburgh, PA 15219

  

P.O. Box 2558 – Lien Perfection Unit

    

Houston, TX 77252

 

Capitalized terms used in the description of collateral set forth on the face of
the UCC-1 Financing Statement to which this Exhibit A pertains shall have the
following meanings:

 

“Accounts” has the meaning specified in Section 9-102 of the UCC.

 

“Blocked Accounts” means any lockbox, deposit, concentration or similar account
of United States Steel which is or becomes subject to a “Blocked Account
Agreement” pursuant to the Security Agreement.

 

“Cash Collateral Account” means an account in the name and under the exclusive
control of the Collateral Agent, into which all amounts owned by United States
Steel that are required to be deposited pursuant to the Credit Agreement and
related documents are deposited from time to time.

 

“Chattel Paper” has the meaning specified in Section 9-102 of the UCC.

 

“Contracts” means all contracts for the sale, lease, exchange or other
disposition of Inventory, whether or not performed and whether or not subject to
termination upon a contingency or at the option of any party thereto.

 

“Credit Agreement” means the Credit Agreement dated as of May 20, 2003 among
United States Steel Corporation, the Lenders party thereto, the LC Issuing Banks
party thereto, JPMorgan Chase Bank, as Administrative Agent, Collateral Agent,
Co-Syndication Agent and Swingline Lender, and General Electric Capital
Corporation, as Co-Collateral Agent and Co-Syndication Agent.

 

“Eligible Transferee” means (a) a special-purpose company created and used
solely for purposes of effecting a Receivables Financing, whether or not a
subsidiary of United States Steel, or (b) any other person which is not a
subsidiary of United States Steel.

 

“General Intangibles” has the meaning specified in Section 9-102 of the UCC.

 

“Instrument” has the meaning specified in Section 9-102 of the UCC.

 

“Inventory” has the meaning specified in Section 9-102 of the UCC.

 

“Receivables” means, with respect to the Debtor, all Accounts owned by it and
all other rights, titles or interests which, in accordance with generally
accepted accounting principles in the United States of America, would be
included in receivables on its balance sheet (including any such Accounts and/or
rights, titles or interests that might be characterized as Chattel Paper,
Instruments or General Intangibles under the UCC), in each case arising from the
sale, lease, exchange or other disposition of Inventory, and all of the Debtor’s
rights to any goods, services or other property related to any of the foregoing
(including returned or repossessed goods and unpaid seller’s rights of
rescission, replevin, reclamation and rights to stoppage in transit), and all
collateral security and supporting obligations of any kind given by any person
with respect to any of the foregoing.

 

“Receivables Financing” means any receivables securitization program or other
type of accounts receivable financing transaction by United States Steel or any
of its subsidiaries (including, without limitation, the receivables financing
transaction effected pursuant to (x) the Purchase and Sale Agreement dated as of
November 28, 2001 among U.S. Steel Receivables LLC, the originators named
therein and United States Steel,

 

A-1

--------------------------------------------------------------------------------

as initial servicer, and (y) the Amended and Restated Receivables Purchase
Agreement dated as of November 28, 2001 among U.S. Steel Receivables LLC, as
seller, United States Steel, as initial servicer, The Bank of Nova Scotia, as
collateral agent, JPMorgan Chase Bank, as a committed purchaser and a funding
agent, and the various other persons from time to time party thereto (as amended
from time to time, the “Initial Receivables Financing”)).

 

“Related Transferred Rights” means (a) rights to payment and collections in
respect of Transferred Receivables, (b) security interests or liens and property
subject thereto purporting to secure or guarantee payment of Transferred
Receivables, (c) guarantees, letters of credit, acceptances, insurance and other
arrangements from time to time supporting or securing payment of Transferred
Receivables, (d) all invoices, documents, books, records and other information
with respect to Transferred Receivables or the obligors thereon, (e) with
respect to any Transferred Receivables, the transferee’s interest in the product
(including returned product), the sale of which by such transferee gave rise to
such Transferred Receivables and (f) all proceeds of the items described in
foregoing clauses (a) through (e).

 

“Security Agreement” means the Security Agreement dated as of May 20, 2003 among
United States Steel and the Collateral Agent.

 

“Transferred Receivables” means any Receivables that have been sold, contributed
or otherwise transferred by the Debtor to an Eligible Transferee in connection
with a Receivables Financing that is not prohibited under the Credit Agreement
(including, without limitation, the Initial Receivables Financing described
above).

 

“UCC” means the Uniform Commercial Code as in effect from time to time in the
State of New York; provided that, if perfection or the effect of perfection or
non-perfection or the priority of any security interest in any collateral is
governed by the Uniform Commercial Code as in effect in a jurisdiction other
than New York, “UCC” means the Uniform Commercial Code as in effect from time to
time in such other jurisdiction for purposes of the provisions hereof relating
to such perfection, effect of perfection or non-perfection or priority.

 

“United States Steel” means United States Steel Corporation, a Delaware
corporation, and its successors.

 

A-2