EXHIBIT 10.5
AMENDED AND RESTATED
INTERCREDITOR AND SUBORDINATION AGREEMENT
THIS AMENDED AND RESTATED INTERCREDITOR AND SUBORDINATION AGREEMENT
("Intercreditor Agreement") dated as of July 12, 2002 is by and among Congress
Financial Corporation, a Delaware corporation, in its capacity as agent pursuant
to the Revolving Loan Agreements (as hereinafter further defined) acting for and
on behalf of the financial institutions which are parties thereto as lenders (in
such capacity, the "Revolving Loan Agent" as hereinafter further defined), the
financial institutions which are parties to the Revolving Loan Agreements as
lenders (collectively, together with Revolving Loan Agent, the "Revolving Loan
Lenders" as hereinafter further defined), Cleveland-Cliffs Inc, an Ohio
corporation ("Cleveland" as hereinafter further defined), The Cleveland- Cliffs
Iron Company, an Ohio corporation ("Cleveland Subsidiary" as hereinafter further
defined) and Ford Motor Company, a Delaware corporation ("Ford" as hereinafter
further defined). Revolving Loan Lenders, Cleveland, Cleveland Subsidiary and
Ford are sometimes individually referred to herein as "Creditor" and
collectively as "Creditors."
W I T N E S S E T H:
WHEREAS, Ford has entered into financing arrangements with Rouge Steel
Company, a Delaware corporation ("Borrower" as hereinafter further defined),
pursuant to which Ford has made and may, upon certain terms and conditions, make
loans to Borrower secured by certain assets and properties of Borrower and its
subsidiaries; and
WHEREAS, Cleveland has made a term loan to Borrower secured by certain
assets and properties of Borrower and its subsidiaries; and
WHEREAS, Cleveland Subsidiary has entered or is about to enter into
arrangements with Borrower, pursuant to which Cleveland Subsidiary will sell
iron ore pellets to Borrower on credit and the obligations of Borrower to pay
for such pellets shall be secured by such pellets and the proceeds thereof; and
WHEREAS, Revolving Loan Lenders have entered into financing arrangements
with Borrower, pursuant to which Revolving Loan Lenders have made and may, upon
certain terms and conditions, make loans and provide other financial
accommodations to Borrower secured by assets and properties of Borrower; and
WHEREAS, Creditors desire to enter into this Intercreditor Agreement to (i)
confirm the relative priority of the security interests of each Creditor in the
assets and properties of Borrower and certain of its affiliates, (ii) provide
for the orderly sharing among Creditors, in accordance
with such priorities, of proceeds of such assets and properties upon any
foreclosure thereon or other disposition thereof, and (iii) agree upon the terms
of the subordination of the obligations of Borrower and such affiliates to
Cleveland, Cleveland Subsidiary and Ford and related matters;
NOW THEREFORE, in consideration of the mutual benefits accruing to
Creditors hereunder and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto do hereby agree
as follows:
1. DEFINITIONS
As used above and in this Intercreditor Agreement, the following terms
shall have the meanings ascribed to them below:
1.1 "Agreements" shall mean, collectively, the Revolving Loan Agreements,
the Cleveland Agreements and the Ford Agreements.
1.2 "Borrower" shall mean Rouge Steel Company, a Delaware corporation,
together with its successors and assigns, including, without limitation, a
receiver, trustee or debtor-in-possession on behalf of such person or on behalf
of any such successor or assign.
1.3 "Business Day" shall have the meaning set forth in the Revolving Loan
Agreements.
1.4 "Cleveland" shall mean Cleveland-Cliffs Inc, an Ohio corporation, and
its successors and assigns.
1.5 "Cleveland Agreements" shall mean, collectively, the Cleveland Loan
Agreement and all agreements, documents and instruments at any time executed
and/or delivered by any Debtor with, to or in favor of Cleveland in connection
with the Cleveland Debt or related to the Cleveland Debt, as all of the
foregoing now exist or may hereafter be amended, modified, supplemented,
extended, renewed, restated or replaced; provided, that the Cleveland Agreements
shall not include any of the Cleveland Subsidiary Agreements.
1.6 "Cleveland Debt" shall mean all obligations, liabilities and
indebtedness of every kind, nature and description owing by any Debtor to
Cleveland arising under any of the Cleveland Agreements, including principal,
interest, charges, fees, premiums, indemnities and expenses, however evidenced,
whether as principal, surety, endorser, guarantor or otherwise, whether now
existing or hereafter arising, whether arising during or after the initial or
any renewal term of the Cleveland Agreements or after the commencement of any
Insolvency Proceeding (and including, without limitation, any principal,
interest, fees, costs, expenses and other amounts, whether or not such amounts
are allowable in whole or in part, in any such case or similar proceeding),
whether direct or indirect, absolute or contingent, joint or several, due or not
due, primary or secondary, liquidated or unliquidated or secured or unsecured.
2
1.7 "Cleveland Loan Agreement" shall mean, the Subordinated Loan and
Security Agreement, dated July __, 2002, by and among Borrower, Guarantors and
Cleveland, as the foregoing now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.
1.8 "Cleveland Subsidiary" shall mean The Cleveland-Cliffs Iron Company, an
Ohio corporation, and its successors and assigns.
1.9 "Cleveland Subsidiary Agreements" shall mean, collectively, the Pellet
Sale Agreement, the Cleveland Subsidiary PMSI Agreement, and all agreements,
documents and instruments at any time executed and/or delivered by any Debtor
with, to or in favor of Cleveland Subsidiary in connection with the Cleveland
Subsidiary Debt or related to the Cleveland Subsidiary Debt, as all of the
foregoing now exist or may hereafter be amended, modified, supplemented,
extended, renewed, restated or replaced; provided, that the Cleveland Subsidiary
Agreements shall not be deemed to include the Cleveland Agreements.
1.10 "Cleveland Subsidiary Collateral" shall mean (a) the Cleveland
Subsidiary Priority Collateral and (b) any and all proceeds thereof.
1.11 "Cleveland Subsidiary Debt" shall mean all obligations, liabilities
and indebtedness of every kind, nature and description owing by Borrower to
Cleveland Subsidiary arising under any of the Cleveland Subsidiary Agreements,
including principal, interest, charges, fees, premiums, indemnities and
expenses, however evidenced, whether as principal, surety, endorser, guarantor
or otherwise, whether now existing or hereafter arising, whether arising during
or after the initial or any renewal term of the Cleveland Subsidiary Agreements
or after the commencement of any Insolvency Proceeding (and including, without
limitation, any principal, interest, fees, costs, expenses and other amounts,
whether or not such amounts are allowable in whole or in part, in any such case
or similar proceeding), whether direct or indirect, absolute or contingent,
joint or several, due or not due, primary or secondary, liquidated or
unliquidated or secured or unsecured.
1.12 "Cleveland Subsidiary Inventory Payable" shall mean at any time the
aggregate amount of the purchase price owed by any Debtor to Cleveland
Subsidiary at such time for the purchase by any Debtor of iron ore pellets
delivered by Cleveland Subsidiary to any Debtor pursuant to Sections 3(b), (c)
or (d) of the Pellet Sale Amendment (as in effect on the date hereof).
1.13 "Cleveland Subsidiary PMSI Agreement" shall mean the letter agreement,
dated as of the date hereof, by and between Cleveland Subsidiary and Borrower
with respect to purchase money security interest granted by Borrower to
Cleveland Subsidiary in the Cleveland Subsidiary Collateral, as the same now
exists or may hereafter be amended, modified, supplemented, extended, renewed,
restated or replaced.
1.14 "Cleveland Subsidiary Priority Collateral" shall mean, collectively,
(a) the iron ore pellets shipped and delivered by Cleveland Subsidiary to
Borrower pursuant to Sections 3(b), (c)
3
or (d) of the Pellet Sale Amendment (as in effect on the date hereof) then in
the possession of Borrower, located at 0000 Xxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx
00000, and which (i) have not been paid for by Borrower, (ii) are segregated
from iron ore pellets of Borrower obtained by Borrower from any other supplier
(but not segregated from iron ore pellets that have ceased to be Cleveland
Subsidiary Priority Collateral having been paid for by Borrower), (iii) are
clearly identified as iron ore pellets supplied by Cleveland Subsidiary and (iv)
are subject to the first priority security interest and lien of Cleveland
Subsidiary and are reported by Cleveland Subsidiary to Agent as iron ore pellets
subject to the first priority security interest and lien of Cleveland
Subsidiary, and (b) identifiable cash proceeds arising from the sale by
Cleveland Subsidiary of such pellets and any insurance proceeds payable in
respect of any loss to such pellets, provided, that, in no event shall the
Cleveland Subsidiary Priority Collateral include any amounts at any time
deposited in or received in the lockbox or blocked account established by any
Debtor in connection with the Revolving Loan Agreements or otherwise with
respect to its financing arrangements with Revolving Loan Agent and Revolving
Loan Lenders for the handling of collections of accounts or other assets and the
remittance thereof to Revolving Loan Agent, or any inventory of any Debtor
manufactured using any iron ore pellets supplied by Cleveland Subsidiary or
accounts of any Debtor arising from the sale of such inventory or any iron ore
pellets reported by Borrower or Cleveland Subsidiary to Agent as pellets which
are not Cleveland Subsidiary Priority Collateral.
1.15 "Collateral" shall mean, collectively, the Lender Priority Collateral
and the Cleveland Subsidiary Priority Collateral.
1.16 "Creditors" shall mean, collectively, Revolving Loan Lenders,
Cleveland, Cleveland Subsidiary and Ford and their respective successors and
assigns; sometimes being referred to herein individually, as a "Creditor".
1.17 "Debt" shall mean, collectively, the Revolving Loan Debt, the
Cleveland Debt, the Cleveland Subsidiary Debt and the Ford Debt.
1.18 "Debtors" shall mean, collectively, Borrower and Guarantors; sometimes
being referred to herein individually, as a "Debtor".
1.19 "Enforcement Action" shall mean the exercise by any Revolving Loan
Lender, or by any Debtor at the request of Revolving Loan Agent, of any of the
enforcement rights and remedies under the Revolving Loan Agreements, applicable
law or otherwise at any time on or after an event of default under the Revolving
Loan Agreements, including, without limitation, any or all of the following: any
motion to vacate any stay on enforcement of its Liens on the Collateral,
solicitation of bids from third parties to conduct the liquidation of
Collateral, the engagement or retention of third parties for the purposes of
valuing, marketing, promoting or selling all or any material portion of the
Collateral, the commencement of any action to foreclose on its Lien on all or
any material portion of the Collateral, notification of account debtors to make
payments to any Revolving Loan Lender or its agents, any action to take
possession of any Collateral or commencement of any legal proceedings or actions
seeking payment of any Revolving Loan Debt or otherwise in connection with the
preservation or protection of any of the
4
Collateral, its value or any rights or remedies of any Revolving Loan Lender
therein or otherwise or as Revolving Loan Agent may deem necessary or
appropriate to enhance the likelihood or maximize the repayment of the Revolving
Loan Debt.
1.20 "Ford" shall mean Ford Motor Company, a Delaware corporation, and its
successors and assigns.
1.21 "Ford Agreements" shall mean, collectively, the Subordinated Loan and
Security Agreement, dated November 21, 2001, by and among Borrower, Guarantors
and Ford and all agreements, documents and instruments at any time executed
and/or delivered by any Debtor with, to or in favor of Ford in connection with
the Ford Debt or related to the Ford Debt, as all of the foregoing now exist or
may hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced.
1.22 "Ford Debt" shall mean all obligations, liabilities and indebtedness
of every kind, nature and description owing by any Debtor to Ford arising under
any of the Ford Agreements, including principal, interest, charges, fees,
premiums, indemnities and expenses, however evidenced, whether as principal,
surety, endorser, guarantor or otherwise, whether now existing or hereafter
arising, whether arising during or after the initial or any renewal term of the
Ford Agreements or after the commencement of any Insolvency Proceeding (and
including, without limitation, any principal, interest, fees, costs, expenses
and other amounts, whether or not such amounts are allowable in whole or in
part, in any such case or similar proceeding), whether direct or indirect,
absolute or contingent, joint or several, due or not due, primary or secondary,
liquidated or unliquidated or secured or unsecured.
1.23 "Guarantors" shall mean, collectively, the following (together with
their respective successors and assigns, including, without limitation, a
receiver, trustee or debtor-in-possession on behalf of such person or on behalf
of any such successor or assign): (a) Rouge Industries, Inc. a Delaware
corporation; (b) QS Steel Inc., a Michigan corporation; (c) Eveleth Taconite
Company, a Minnesota corporation; and (d) any other person liable on or in
respect of the Revolving Loan Debt, the Cleveland Debt and the Ford Debt; each
sometimes being referred to herein individually as a "Guarantor".
1.24 "Insolvency Proceeding" shall mean, as to any Person, any of the
following: (a) any case or proceeding with respect to such Person under the U.S.
Bankruptcy Code or any other Federal or State bankruptcy, insolvency,
reorganization or other law affecting creditors' rights generally or any similar
proceedings seeking any stay, reorganization, arrangement, composition or
readjustment of the obligations and indebtedness of such Person or (b) any
proceeding seeking the appointment of any trustee, receiver, liquidator,
custodian or other insolvency official with similar powers with respect to such
Person or any or all of its assets or properties or (c) any proceedings for
liquidation, dissolution or other winding up of the business of such Person or
(d) any assignment for the benefit of creditors or any marshaling of assets of
such Person.
5
1.25 "Junior Creditors" shall mean, at any time as to any Collateral,
collectively, the Creditors that do not have the first priority Lien therein at
such time pursuant to the terms of this Intercreditor Agreement; sometimes being
referred to herein individually as a "Junior Creditor".
1.26 "Junior Debt" shall mean, at any time, the portion of the Debt owing
to any Junior Creditor at such time.
1.27 "Lender Priority Collateral" shall mean all of the property and
interests in property, real or personal, tangible or intangible, now owned or
hereafter acquired by any Debtor in or upon which any Creditor at any time has a
Lien granted pursuant to such Creditor's Agreements, and including, without
limitation, all proceeds of such property and interests in property; provided,
that, the term "Lender Priority Collateral" shall not include any Cleveland
Subsidiary Priority Collateral.
1.28 "Lien" shall mean any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, security interest, encumbrance (including, but
not limited to, easements, rights of way and the like), lien (statutory or
other), security agreement or transfer intended as security, including without
limitation, any conditional sale or other title retention agreement, the
interest of a lessor under a capital lease or any financing lease having
substantially the same economic effect as any of the foregoing.
1.29 "Payment in full" or "payment in full" shall mean (a) as to the
Cleveland Debt, the Cleveland Subsidiary Debt and the Ford Debt, the
indefeasible payment and satisfaction in full in immediately available funds of
all of such Debt and the termination of the financing arrangements provided by
such Creditor to Debtors (but not including for this purpose the refinancing or
replacement of the financing provided by such Creditor to Debtors) and (b) as to
the Revolving Loan Debt, the indefeasible payment and satisfaction in full in
immediately available funds of all of such Debt and the termination of the
financing arrangements provided by such Creditor to Debtors (but not including
for this purpose the refinancing or replacement of the financing provided by
such Creditor to Debtors) and, at Revolving Loan Agent's option, the receipt by
Revolving Loan Agent of cash collateral in the amount equal to one hundred five
(105%) percent of the aggregate undrawn amount of all letter of credit
accommodations then outstanding plus the amount of any fees and expenses payable
in connection therewith through the end of the latest expiration date of such
letter of credit accommodations. If after receipt of any payment of, or proceeds
of Collateral applied to the payment of, any of the Revolving Loan Debt,
Revolving Loan Agent or any other Revolving Loan Lender is required to surrender
or return such payment or proceeds to any person for any reason, then the
Revolving Loan Debt intended to be satisfied by such payment or proceeds shall
be reinstated and continue and this Intercreditor Agreement shall continue in
full force and effect as if such payment or proceeds had not been received by
Revolving Loan Agent or such Revolving Loan Lender, as the case may be.
1.30 "Pellet Sale Agreement" shall mean the Pellet Sale and Purchase and
Trade Agreement, dated January 1, 1991, by and between Cleveland Subsidiary and
Borrower, as amended by letter agreements dated as of July 1, 1996, April 7,
1997, June 3, 1997, March 31,
6
1998, August 17, 2001 and the Pellet Sale Amendment, as the same now exists or
may hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced.
1.31 "Pellet Sale Amendment" shall mean the letter agreement, entered into
on the date hereof and dated as of May 16, 2002, by and between Cleveland
Subsidiary and Borrower, as the same now exists or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced.
1.32 "Permitted Cleveland Payment" shall mean (a) any regularly scheduled
payment of principal or interest in respect of the Cleveland Debt in accordance
with the terms of the Cleveland Agreements (as in effect on the date hereof) and
(b) any payment required to be made by Borrower pursuant to Section 4(c)(ii) of
the Cleveland Loan Agreement (as in effect on the date hereof).
1.33 "Person" or "person" shall mean any individual, sole proprietorship,
partnership, corporation (including, without imitation, any corporation which
elects subchapter S status under the Internal Revenue Code of 1986, as amended),
limited liability company, limited liability partnership, business trust,
unincorporated association, joint stock company, trust, joint venture, or other
entity or any government or any agency or instrumentality or political
subdivision thereof.
1.34 "Revolving Loan Agent" shall mean Congress Financial Corporation, a
Delaware corporation, and its successors and assigns in its capacity as agent
pursuant to the Revolving Loan Agreements acting for and on behalf of the other
Revolving Loan Lenders and any successor or replacement agent.
1.35 "Revolving Loan Agreements" shall mean, collectively, the Loan and
Security Agreement, dated March 13, 2001, by and among Revolving Loan Agent,
Revolving Loan Lenders and Debtors and all agreements, documents and instruments
at any time executed and/or delivered by any Debtor with, to or in favor of any
Revolving Loan Lender in connection therewith or related thereto, as all of the
foregoing now exist or may hereafter be amended, modified, supplemented,
extended, renewed, restated, refinanced, replaced or restructured (in whole or
in part and including any agreements with, to or in favor of any other lender or
group of lenders that at any time refinances, replaces or succeeds to all or any
portion of the Revolving Loan Debt).
1.36 "Revolving Loan Lenders" shall mean, collectively, Revolving Loan
Agent and any other person who is a party to the Revolving Loan Agreements as
lender (and including any other lender or group of lenders that at any time
refinances, replaces or succeeds to all or any portion of the Revolving Loan
Debt or is otherwise party to the Revolving Loan Agreements as a lender).
1.37 "Revolving Loan Debt" shall mean any and all obligations, liabilities
and indebtedness of every kind, nature and description owing by any Debtor to
any Revolving Loan Lender arising under any of the Revolving Loan Agreements,
including principal, interest, charges, fees, premiums, indemnities and
expenses, however evidenced, whether as principal,
7
surety, endorser, guarantor or otherwise, whether now existing or hereafter
arising, whether arising during or after the initial or any renewal term of the
Revolving Loan Agreements or after the commencement of any Insolvency Proceeding
(and including, without limitation, any principal, interest, fees, costs,
expenses and other amounts, which would accrue and become due but for the
commencement of such case, whether or not such amounts are allowed or allowable
in whole or in part in any such case), whether direct or indirect, absolute or
contingent, joint or several, due or not due, primary or secondary, liquidated
or unliquidated, or secured or unsecured.
1.38 "Rouge Pellet Inventory" shall mean any Inventory of Borrower
consisting of iron ore pellets that is owned by Borrower free and clear of any
security interest, lien, claim or other encumbrance of any party, including,
without limitation, any security interest, lien, claim or other encumbrance of
Cleveland Subsidiary.
1.39 "Senior Creditor" shall mean, at any time, as to any Collateral, the
Creditor that has the first priority Lien therein at such time pursuant to the
terms of this Intercreditor Agreement.
1.40 All terms defined in the Uniform Commercial Code as in effect in the
State of New York, unless otherwise defined herein shall have the meanings set
forth therein. All references to any term in the plural shall include the
singular and all references to any term in the singular shall include the
plural.
2. SECURITY INTERESTS; PRIORITIES; REMEDIES
2.1 Acknowledgement of Liens. Each Creditor hereby acknowledges that the
other Creditors have been granted a Lien upon the Collateral described in the
applicable Agreements; except, that, (a) Cleveland Subsidiary has and shall have
a Lien only upon the Cleveland Subsidiary Collateral and no other assets or
properties of Debtors, and (b) the Lien of Cleveland Subsidiary upon the
Cleveland Subsidiary Collateral secures and shall only secure the Cleveland
Subsidiary Debt consisting of the Cleveland Subsidiary Inventory Payable.
2.2 Priority of Liens.
(a) Notwithstanding the order or time of attachment, or the order, time
or manner of perfection, or the order or time of filing or recordation of any
document or instrument, or other method of perfecting a security interest in
favor of each Creditor in any Lender Priority Collateral, and notwithstanding
any conflicting terms or conditions which may be contained in any of the
Agreements the following Lien priorities shall strictly apply in defining the
respective Lien priorities of each Creditor in the Lender Priority Collateral:
(i) first: the Liens upon such Lender Priority Collateral of
Revolving Loan Agent to the full extent of the Revolving Loan Debt;
(ii) second: the Liens upon such Lender Priority Collateral of
Cleveland to the full extent of the Cleveland Debt;
8
(iii) third: the Liens upon such Lender Priority Collateral of Ford
to the full extent of the Ford Debt;
(iv) fourth: the Liens upon such Lender Priority Collateral of
Cleveland Subsidiary to the full extent of the Cleveland Subsidiary Debt
consisting of the Cleveland Subsidiary Inventory Payable;
(b) Notwithstanding the order or time of attachment, or the order, time
or manner of perfection, or the order or time of filing or recordation of any
document or instrument, or other method of perfecting a security interest in
favor of each Creditor in any Cleveland Subsidiary Priority Collateral, and
notwithstanding any conflicting terms or conditions which may be contained in
any of the Agreements the following Lien priorities shall strictly apply in
defining the respective Lien priorities of each Creditor in the Cleveland
Subsidiary Priority Collateral:
(i) first: the Liens upon such Cleveland Subsidiary Priority
Collateral of Cleveland Subsidiary to the full extent of the Cleveland
Subsidiary Debt consisting of the Cleveland Subsidiary Inventory Payable;
(ii) second: the Liens upon such Cleveland Subsidiary Priority
Collateral of Revolving Loan Agent to the full extent of the Revolving Loan
Debt;
(iii) third: the Liens upon such Cleveland Subsidiary Priority
Collateral of Cleveland to the full extent of the Cleveland Debt;
(iv) fourth: the Liens upon such Cleveland Subsidiary Priority
Collateral of Ford to the full extent of the Ford Debt.
2.3 Priority of Payments.
(a) The proceeds of any sale, disposition of other realization upon all
or any part of the Lender Priority Collateral shall be applied in the following
order of priorities:
(i) first, to the payment in full of the Revolving Loan Debt in
whatever manner and order Revolving Loan Agent chooses in accordance with the
provisions of the Revolving Loan Agreements and applicable law;
(ii) second, to the payment in full of the Cleveland Debt in
whatever manner and order Cleveland chooses in accordance with the provisions of
the Cleveland Agreements and applicable law;
(iii) third, to the payment in full of the Ford Debt in whatever
manner and order Ford chooses in accordance with the provisions of the Ford
Agreements and applicable law;
9
(iv) fourth, to the payment in full of the Cleveland Subsidiary Debt
consisting of the Cleveland Subsidiary Inventory Payable, in whatever manner and
order Cleveland chooses in accordance with the provisions of the Cleveland
Subsidiary Agreements and applicable law.
(b) The proceeds of any sale, disposition of other realization upon all
or any part of the Cleveland Subsidiary Priority Collateral shall be applied in
the following order of priorities:
(i) first, to the payment in full of the Cleveland Subsidiary Debt
consisting of the Cleveland Subsidiary Inventory Payable, in whatever manner and
order Cleveland Subsidiary chooses in accordance with the provisions of the
Cleveland Subsidiary Agreements and applicable law;
(ii) second, to the payment in full of the Revolving Loan Debt in
whatever manner and order Revolving Loan Agent chooses in accordance with the
provisions of the Revolving Loan Agreements and applicable law;
(iii) third, to the payment in full of the Cleveland Debt in
whatever manner and order Cleveland chooses in accordance with the provisions of
the Cleveland Agreements and applicable law;
(iv) fourth, to the payment in full of the Ford Debt in whatever
manner and order Ford chooses in accordance with the provisions of the Ford
Agreements and applicable law.
2.4 Priorities Unaffected by Action or Inaction. The lien priorities
provided in Section 2.2 shall not be altered or otherwise affected by any
amendment, modification, supplement, extension, renewal, restatement or
refinancing of any of the Debt, nor by any action or inaction which any Creditor
may take or fail to take in respect of the Collateral.
2.5 Rights of Third Parties; No Contest of Lien. Each Creditor shall be
solely responsible for perfecting and maintaining the perfection of its Lien in
and to each item constituting the Collateral in which such Creditor has been
granted a Lien. The foregoing provisions of this Agreement are intended solely
to govern the respective lien priorities as between the Creditors and shall not
impose on any Creditor any obligations in respect of the disposition of proceeds
of foreclosure on any Collateral which would conflict with prior perfected
claims therein in favor of any other person or any order or decree of any court
or other governmental authority or any applicable law. Revolving Loan Agent,
Cleveland, Cleveland Subsidiary and Ford each agrees that it will not contest
the validity, perfection, priority or enforceability of the Liens upon the
Collateral of the other and that as between the Creditors, the terms of this
Intercreditor Agreement shall govern even if part or all of the Revolving Loan
Debt, the Cleveland Debt, the Cleveland Subsidiary Debt, the Ford Debt or the
Liens securing payment and performance thereof are not perfected or are avoided,
disallowed, set aside or otherwise invalidated in any judicial proceeding or
otherwise.
10
2.6 Right to Enforce Agreement. Subject to the terms and conditions set
forth in this Intercreditor Agreement, the Senior Creditor shall have the
exclusive right to manage, perform and enforce the terms of the Agreements of
such Creditor with respect to the Collateral, to exercise and enforce all
privileges and rights thereunder according to its discretion and the exercise of
its business judgment, including, without limitation, the exclusive right to
take or retake control or possession of such Collateral and to hold, prepare for
sale, process, sell, lease, dispose of, or liquidate such Collateral (except
with respect to the Cleveland Subsidiary Priority Collateral which shall be
managed exclusively by Revolving Loan Agent, except as set forth in Section
2.8(d) hereof), provided, that, any foreclosure sale by any Creditor shall be
conducted in a commercially reasonable manner. No other Creditor shall have any
right to direct the Senior Creditor to exercise any right, remedy or power with
respect to the Collateral and the other Creditors consent to the exercise by the
Senior Creditor of any such right, remedy or power in accordance with the terms
hereof and applicable law. No Creditor, except the Senior Creditor, shall
institute any suit or assert in any suit, bankruptcy, insolvency or other
proceeding any claim against the Senior Creditor seeking damages from or other
relief by way of specific performance, instructions or otherwise, with respect
to, and the Senior Creditor shall not be liable for, any action taken or omitted
to be taken by such Creditor with respect to the Collateral, except in each
case, to the extent the conduct of such Creditor constitutes gross negligence or
willful misconduct as determined pursuant to a final non-appealable order of a
court of competent jurisdiction or such Creditor has failed to comply with the
terms hereof or any applicable law. In no event shall the gross negligence or
willful misconduct of the Senior Creditor or the failure by such Creditor to act
in accordance with applicable law or to otherwise comply with the terms hereof
excuse performance by the other Creditors of any of their respective obligations
hereunder, including this provision.
2.7 Sale and Release of Collateral. Notwithstanding anything to the
contrary contained in any of the Agreements, only the Senior Creditor shall have
the right to restrict or permit, or approve or disapprove, the sale, transfer or
other disposition of Collateral (except with respect to the Cleveland Subsidiary
Priority Collateral which shall be managed exclusively by Revolving Loan Agent).
To the extent such Collateral is sold or otherwise disposed of by the Senior
Creditor or its agents, each of the other Creditors shall (a) be deemed to have
automatically and without further action released and terminated any Liens it
may have on the Collateral, (b) be deemed to have authorized the Senior Creditor
to file UCC amendments and terminations covering the Collateral so sold or
otherwise disposed of as to UCC financing statements between any Debtor and any
other Creditor to evidence such release and termination, (c) promptly upon the
request of the Senior Creditor execute and deliver such other release documents
and confirmations of the authorization to file UCC amendments and terminations
provided for herein, in each case as the Senior Creditor may require in
connection with such sale or other disposition by the Senior Creditor or its
agents to evidence and effectuate such termination and release, provided, that,
(i) any such release or UCC amendment or termination by such Creditors shall not
extend to or otherwise affect any of the rights, if any, of such Creditors to
the proceeds from any such sale or other disposition of Collateral and (ii) any
such release shall not be deemed to waive any claim or cause of action by such
Creditors against the Senior Creditor for the failure of the Senior Creditor to
comply with the terms hereof or applicable law and (d) be deemed to have
consented under the Agreements to such sale or other disposition. In the event
that for any
11
reason any Creditor shall fail to immediately execute and deliver to the Senior
Creditor any such release documents, the Senior Creditor is hereby irrevocably
authorized to execute and deliver such release documents on behalf of such other
Creditor as its attorney-in-fact.
2.8 Limitation on Remedies.
(a) Notwithstanding any rights or remedies available to a Creditor under
any of the Agreements, applicable law or otherwise, until payment in full of the
Revolving Loan Debt, Cleveland, Cleveland Subsidiary and Ford shall not, and
until payment in full of the Cleveland Debt, Cleveland Subsidiary and Ford shall
not, directly or indirectly, with respect to any Debt owing to it (i) seek to
collect from any Debtor from or by way of any Collateral any of such Debt or
exercise any of its rights or remedies with respect to the Collateral upon a
default or event of default by any Debtor under its Agreements or (ii) seek to
foreclose or realize upon (judicially or non-judicially) its Lien on any
Collateral (including, without limitation, by setoff or notification of account
debtors) or assert any claims or interests therein.
(b) Notwithstanding anything to the contrary contained in Section 2.8(a)
above, after not less than five (5) days prior written notice to Revolving Loan
Agent, Cleveland and Cleveland Subsidiary, Ford shall have the right to take
action to enforce its Liens on any of the Collateral or assert any claims or
interests therein, or exercise any other similar remedies with respect thereto
in the event of the failure of Borrower to make any regularly scheduled payments
of interest in respect of the Ford Debt in accordance with the terms of the Ford
Agreements (as in effect on the date hereof) and for so long as such event of
default is continuing, subject at all times to the provisions of Sections 2.2
and 2.3 of this Intercreditor Agreement, commencing one hundred eighty (180)
days after the date of the receipt by Revolving Loan Agent, Cleveland and
Cleveland Subsidiary of written notice from Ford of the declaration by Ford of
such a default under the Ford Agreements and the written demand by Ford upon
Borrower for the immediate payment of all of the Ford Debt under the Ford
Agreements, so long as at the time that Ford shall exercise any such right, no
Enforcement Action by any Revolving Loan Lender shall have been commenced and be
continuing.
(c) Notwithstanding anything to the contrary contained in Section 2.8(a)
above, after not less than five (5) days prior written notice to Revolving Loan
Agent, Ford and Cleveland Subsidiary, Cleveland shall have the right to take
action to enforce its Liens on any of the Collateral or assert any claims or
interests therein, or exercise any other similar remedies with respect thereto
in the event of the failure of Borrower to make any Permitted Cleveland Payment
and for so long as such event of default is continuing, subject at all times to
the provisions of Sections 2.2 and 2.3 of this Intercreditor Agreement,
commencing one hundred eighty (180) days after the date of the receipt by
Revolving Loan Agent, Ford and Cleveland Subsidiary of written notice from
Cleveland of the declaration by Cleveland of such a default under the Cleveland
Agreements and the written demand by Cleveland upon Borrower for the immediate
payment of all of the Cleveland Debt under the Cleveland Agreements, so long as
at the time that Cleveland shall exercise any such right, no Enforcement Action
by any Revolving Loan Lender shall have been commenced and be continuing.
12
(d) Notwithstanding anything to the contrary contained in Section 2.8(a)
above, after not less than five (5) days prior written notice to Revolving Loan
Agent, Cleveland and Ford, Cleveland Subsidiary shall have the right to take
action to enforce its Liens on any of the Cleveland Subsidiary Priority
Collateral or assert any claims or interests therein, or exercise any other
similar remedies with respect thereto in the event of the failure of Borrower to
make any regularly scheduled payments in respect of the Cleveland Subsidiary
Debt in accordance with the terms of the Cleveland Subsidiary Agreements (as in
effect on the date hereof) and for so long as such event of default is
continuing, subject at all times to the provisions of Sections 2.2 and 2.3 of
this Intercreditor Agreement, commencing sixty (60) days after the date of the
receipt by Revolving Loan Agent, Cleveland and Ford of written notice from
Cleveland Subsidiary of the declaration by Cleveland Subsidiary of such a
default under the Cleveland Subsidiary Agreements and the written demand by
Cleveland Subsidiary upon Borrower for the immediate payment of all of the
Cleveland Subsidiary Debt consisting of the Cleveland Subsidiary Inventory
Payable, so long as (i) at the time that Cleveland Subsidiary shall exercise any
such right, no Enforcement Action by any Revolving Loan Lender shall have been
commenced and be continuing and (ii) Revolving Loan Agent has received from
Cleveland Subsidiary evidence in form and substance satisfactory to Revolving
Loan Agent that the amount of the Cleveland Subsidiary Priority Collateral
subject to such enforcement is consistent with the amount of Cleveland
Subsidiary Priority Collateral reported to Revolving Loan Agent in the most
recent collateral reports provided by Borrower to Revolving Loan Agent in
accordance with Section 7.1 of the Loan and Security Agreement dated March 13,
2001, by and among Borrowers, Guarantors, Revolving Loan Agent and Revolving
Loan Lenders, as the same now exists and may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced, and by Cleveland
Subsidiary to Revolving Loan Agent in accordance with Section 4.3 hereof.
(e) Notwithstanding anything to the contrary contained in Section 2.8(a)
above, such Section shall not in any way limit or impair the right of any
Creditor to: (i) bid for and purchase Collateral at any private or judicial
foreclosure upon such Collateral initiated by the Senior Creditor, or (ii)
participate in any Insolvency Proceeding or take any other action involving the
readjustment of all or any part of the Debt of such Creditors, or (iii) exercise
its right to accelerate the maturity of such Creditor's portion of the Debt in
accordance with the applicable Agreements as in effect on the date hereof, or
(iv) send such notices of the existence of, or any evidence or confirmation of,
such Creditor's portion of the Debt under its Agreements or its Liens in the
Collateral to any court or governmental agency, or file or record any such
notice or evidence to the extent necessary to prove or preserve its Liens in the
Collateral or such Creditor's portion of the Debt or (v) commence legal
proceedings against any Debtor (but not the Collateral or any other assets of
any Debtor) to the extent necessary to prevent the expiration of any applicable
statute of limitation with respect to its rights under its Agreements (but not
obtain or enforce any judgment against any Debtor); provided, that, such legal
proceeding does not interfere with the rights of the Senior Creditor or the
exercise by the Senior Creditor of such rights or involve any contest or
challenge to the validity, perfection, priority or enforceability of the Liens
of the Senior Creditor or (vi) join (but not control) any foreclosure or other
lien enforcement proceeding with respect to the Collateral or any Debtor
initiated by the Senior
13
Creditor, so long it does not delay or interfere with the exercise by the Senior
Creditor of its rights.
2.9 Cross-Collateralization. Notwithstanding anything to the contrary
contained herein, Cleveland and Cleveland Subsidiary acknowledge that (a)
Debtors are not and will not be liable to Cleveland Subsidiary for the Cleveland
Debt arising pursuant to the Cleveland Agreements, (b) Debtors are not and will
not be liable to Cleveland for the Cleveland Subsidiary Debt arising pursuant to
the Cleveland Subsidiary Agreements, (c) the Liens of Cleveland securing the
Cleveland Debt do not and shall not constitute Liens securing the Cleveland
Subsidiary Debt, (d) the Liens of Cleveland Subsidiary securing the Cleveland
Subsidiary Debt consisting of the Cleveland Subsidiary Inventory Payable do not
and shall not constitute Liens securing the Cleveland Debt or any other
indebtedness or obligations of Borrower to Cleveland Subsidiary pursuant to the
Cleveland Subsidiary Agreements or otherwise, and (e) as between Cleveland, on
the one hand and Cleveland Subsidiary, on the other hand, the Cleveland Debt and
the Cleveland Subsidiary Debt are several obligations and not joint and several
obligations of Borrower.
2.10 Notices of Default, etc. Each Creditor shall give to the other
Creditors concurrently with the giving thereof to any Debtor, (a) a copy of any
written notice by such Creditor of either a default or an event of default under
its Agreements with any Debtor, or written notice of demand of payment from any
Debtor, and (b) any written notice sent by such Creditor to any Debtor at any
time an event of default under such Creditor's Agreements with any Debtor exists
stating such Creditor's intention to exercise any of its enforcement rights or
remedies, including written notice pertaining to any foreclosure on any of the
Collateral or other judicial or non-judicial remedy in respect thereof, and any
legal process served or filed in connection therewith; provided, that, the
failure of any party to give notice as required hereby shall not affect the
relative priorities of Creditors' respective Liens as provided herein or the
validity or effectiveness of any such notice as against any Debtor. Debtors
hereby authorize and consent to each Creditor sending any such notices or
providing any other information to the other Creditors and hereby waive and
release any claim or cause of action against any Creditor as a result of such
notice or providing such information.
14
3. SUBORDINATION OF JUNIOR DEBT
3.1 Subordination. Except as specifically set forth in Section 3.2 below
(a) Ford hereby subordinates its right to payment and satisfaction of the Ford
Debt and the payment thereof, directly or indirectly, by any means whatsoever,
is deferred, to the indefeasible payment and satisfaction in full of all the
Revolving Loan Debt and Cleveland Debt; and (b) Cleveland hereby subordinates
its right to payment and satisfaction of the Cleveland Debt and the payment
thereof, directly or indirectly, by any means whatsoever, is deferred, to the
indefeasible payment and satisfaction in full of all the Revolving Loan Debt.
3.2 Permitted Payments.
(a) (i) Revolving Loan Agent, Ford, Cleveland and Cleveland Subsidiary
hereby agree that, notwithstanding anything to the contrary contained in Section
2.8 or Section 3.1, unless and until any Revolving Loan Lender or Cleveland
shall have given Ford written notice of the occurrence of an event of default
under the Revolving Loan Agreements or the Cleveland Agreements, Debtors may
make, and Ford may receive and retain from any Debtor regularly scheduled
payments of interest, on an unaccelerated basis, in respect of the Ford Debt in
accordance with the terms of the Ford Agreements as in effect on the date hereof
(but not any prepayments, non-mandatory payments or any payments pursuant to
acceleration or claims of breach or to acquire any Ford Debt or otherwise); and
(ii) Revolving Loan Agent, Ford, Cleveland, and Cleveland Subsidiary hereby
agree that, notwithstanding anything to the contrary contained in Section 2.8 or
Section 3.1, unless and until any Revolving Loan Lender shall have given
Cleveland written notice of either the occurrence of an event of default under
the Revolving Loan Agreements or that after giving effect to any payment made or
to be made in accordance with this Section 3.2(a)(ii), an event of default
exists or would exist under the Revolving Loan Agreements, Debtors may make and
Cleveland may receive and retain from any Debtor any Permitted Cleveland Payment
(but not any prepayments, non-mandatory payments or any payments pursuant to
claims of breach or to acquire any Cleveland Debt or otherwise); provided, that,
Revolving Loan Agent shall have received from Cleveland not less than thirty
(30) days prior written notice of Borrower's obligation to make any payment
described in Section 1.32(b) hereof.
(b) Revolving Loan Agent, Cleveland, Cleveland Subsidiary and Ford
hereby agree that, notwithstanding anything to the contrary contained in Section
2.8, Debtors may make, and Cleveland Subsidiary may receive and retain from any
Debtor in the ordinary course of business, payments in respect of the Cleveland
Subsidiary Debt arising from the sale of iron ore pellets by Cleveland
Subsidiary to Borrower in accordance with the Pellet Sale Agreement (as in
effect on the date hereof).
3.3 Distributions.
(a) In the event of any distribution, division, or application, partial
or complete, voluntary or involuntary, by operation of law or otherwise, of all
or any part of the assets of any Debtor or the proceeds thereof in any
Insolvency Proceeding or upon the sale of all or
15
substantially all of any Debtor's assets, then, and in any such event, (i)
Revolving Loan Lenders shall first receive payment in full of all of the
Revolving Loan Debt prior to the payment of all or any part of the Cleveland
Debt, the Ford Debt and the Cleveland Subsidiary Debt (except as to the
Cleveland Subsidiary Debt, for payments thereof from distributions constituting
Cleveland Subsidiary Priority Collateral), (ii) until payment in full of the
Revolving Loan Debt, Revolving Loan Lenders shall be entitled to receive any
payment or distribution of any kind or character, whether in cash, securities or
other property, which is payable or deliverable in respect of any or all of the
Cleveland Debt, the Ford Debt and the Cleveland Subsidiary Debt (except as to
the Cleveland Subsidiary Debt, for payments thereof from distributions
constituting Cleveland Subsidiary Priority Collateral), (iii) after Revolving
Loan Lenders shall have received payment in full of all of the Revolving Loan
Debt, Cleveland shall receive payment in full of all of the Cleveland Debt prior
to the payment of all or any part of the Ford Debt and the Cleveland Subsidiary
Debt (except as to the Cleveland Subsidiary Debt, for payments thereof from
distributions constituting Cleveland Subsidiary Priority Collateral) and (iv)
after Revolving Loan Lenders shall have received payment in full of all of the
Revolving Loan Debt and until payment in full of the Cleveland Debt, Cleveland
shall be entitled to receive any payment or distribution of any kind or
character, whether in cash, securities or other property, which is payable or
deliverable in respect of any or all of the Ford Debt or the Cleveland
Subsidiary Debt.
(b) In the event any Junior Creditor does not file a proper claim or
proof of debt in the form required in any Insolvency Proceeding with respect to
any Debtor prior to ten (10) days before the expiration of the time to file such
claim or proofs, then the Senior Creditor shall have the right to file and prove
all claims therefor and to take such other action in the name of such Junior
Creditor or otherwise, as the Senior Creditor may determine to be necessary or
appropriate for the enforcement of the provisions of this Intercreditor
Agreement or for the Senior Creditor to receive the benefits hereof.
Notwithstanding anything to the contrary contained herein, such Junior Creditor
shall be entitled to vote its claim in any bankruptcy, insolvency or
receivership proceeding so long as such Junior Creditor does not (i) challenge
any Liens of the other Creditors, (ii) challenge or dispute the validity or
priority of any Revolving Loan Debt, or (iii) vote its claim in any manner which
would be inconsistent with the provisions of this Intercreditor Agreement.
(c) To the extent necessary for the Senior Creditor to realize the
benefits of the subordination of the Junior Debt provided for herein (including
the right to receive any payment and distributions which might otherwise be
payable or deliverable in respect of the Junior Debt in any proceeding described
in Section 3.3(a) or otherwise), the Junior Creditors shall execute and deliver
to the Senior Creditor such instruments or documents (together with such
assignments or endorsements as the Senior Creditor shall deem necessary), as may
be reasonably requested by the Senior Creditor.
3.4 Payments Received by Junior Creditors. Should any payment or
distribution or security or instrument or proceeds thereof be received by any
Junior Creditor in respect of its Debt to which the Senior Creditor is entitled
pursuant to the terms hereof, such Junior Creditor shall receive and hold the
same in trust, as trustee, for the benefit of the Senior Creditor, segregated
from other funds and property of such Junior Creditor and shall forthwith
deliver the
16
same to the Senior Creditor (together with any endorsement or assignment of such
Junior Creditor where necessary), for application to any of the Senior
Creditor's Debt. In the event of the failure of any Junior Creditor to make any
such endorsement or assignment to the Senior Creditor, the Senior Creditor, or
any of its officers or employees, are hereby irrevocably authorized on behalf of
such Junior Creditor to make the same.
3.5 Instrument Legend and Notation. Any instrument at any time evidencing
the Cleveland Debt, the Ford Debt, or any portion thereof, shall be permanently
marked on its face with a legend conspicuously indicating that payment thereof
is subordinate in right of payment to subject to the terms and conditions of
this Intercreditor Agreement, and after being so marked certified copies thereof
shall be delivered to Revolving Loan Agent. In the event any legend or
endorsement is omitted, Revolving Loan Agent or any of its officers or
employees, are hereby irrevocably authorized on behalf of the Junior Creditors
to make the same. No specific legend, further assignment or endorsement or
delivery of notes, guarantees or instruments shall be necessary to subject any
of the Cleveland Debt, or, the Ford Debt to the subordination thereof contained
in this Agreement.
4. COVENANTS, REPRESENTATIONS AND WARRANTIES
4.1 Additional Covenants.
(a) Ford and Debtors agree that, except as set forth in Section 3.2
above, Debtors shall not, directly or indirectly, make and Ford shall not,
directly or indirectly, accept or receive any payment of principal or interest
or any prepayment or non-mandatory payment or any payment pursuant to
acceleration or claims of breach or any payment to acquire Ford Debt or
otherwise in respect of any Ford Debt.
(b) Cleveland and Debtors agree that, except as set forth in Section 3.2
above, Debtors shall not, directly or indirectly, make and Cleveland shall not,
directly or indirectly, accept or receive any payment of principal or interest
or any prepayment or non-mandatory payment or any payment pursuant to
acceleration or claims of breach or any payment to acquire Cleveland Debt or
otherwise in respect of any Cleveland Debt.
(c) Cleveland Subsidiary and Debtors agree that, except as set forth in
Section 3.2 above, Debtors shall not, directly or indirectly, make and Cleveland
Subsidiary shall not, directly or indirectly, accept or receive any payment of
principal or interest or any prepayment or non-mandatory payment or any payment
pursuant to acceleration or claims of breach or any payment to acquire Cleveland
Subsidiary Debt or otherwise in respect of any Cleveland Subsidiary Debt.
(d) Ford agrees that Ford shall not sell, assign or pledge any interest
in any of the Ford Debt, except, that, Ford may assign or pledge the Ford Debt
so long as (i) Revolving Loan Agent and Cleveland shall have received from any
purchaser, assignee or pledgee acquiring any interest in the Ford Debt a written
acknowledgment of receipt of a copy of this Intercreditor Agreement together
with the written agreement of such person to be bound by the terms and
17
conditions of this Intercreditor Agreement and (ii) such assignee, pledgee or
other person shall be a subsidiary of Ford incorporated in the United States
with a tangible net worth of not less than $100,000,000 or otherwise shall be a
person acceptable to Revolving Loan Agent in its reasonable determination.
(e) Cleveland agrees that Cleveland shall not sell, assign or pledge any
interest in any of the Cleveland Debt.
(f) Cleveland Subsidiary agrees that Cleveland Subsidiary shall not
sell, assign or pledge any interest in any of the Cleveland Subsidiary Debt.
(g) Debtors agree that they shall, at any time or times upon the request
of Revolving Loan Agent, promptly furnish to Revolving Loan Agent a statement
that is true, correct and complete of the outstanding Ford Debt, Cleveland
Subsidiary Debt and Cleveland Debt.
(h) Revolving Loan Agent, Cleveland, Cleveland Subsidiary and Ford each
agree to execute and deliver to the other such additional agreements, documents
and instruments and take such further actions as may be necessary or desirable
in the reasonable opinion of Revolving Loan Agent, Cleveland, Cleveland
Subsidiary or Ford, as the case may be, to effectuate the provisions and
purposes of this Intercreditor Agreement.
4.2 Additional Representations and Warranties.
(a) Ford represents and warrants to the other Creditors that:
(i) as of the date hereof, the total principal amount of the Ford
Debt outstanding is $75,000,000;
(ii) Ford is the exclusive legal and beneficial owner of all of the
Ford Debt;
(iii) as of the date hereof, Ford has no actual knowledge of any
lien, security interest or other claim created by Ford on the Ford Debt;
(iv) this Intercreditor Agreement constitutes the legal, valid and
binding obligations of Ford, enforceable in accordance with its terms.
(b) Cleveland represents and warrants to the other Creditors that:
(i) after giving effect to the Loan (as such term is defined in the
Cleveland Loan Agreement as in effect on the date hereof) to be made on July 12,
2002, the total principal amount of the Cleveland Debt outstanding is
$10,000,000;
(ii) Cleveland is the exclusive legal and beneficial owner of all of
the Cleveland Debt;
18
(iii) as of the date hereof, Cleveland has no actual knowledge of
any lien, security interest or other claim created by Cleveland on the Cleveland
Debt;
(iv) this Intercreditor Agreement constitutes the legal, valid and
binding obligations of Cleveland, enforceable in accordance with its terms.
(c) Cleveland Subsidiary represents and warrants to the other Creditors
that:
(i) as of July 11, 2002, (A) the Cleveland Subsidiary Inventory
Payable is $0 and (B) the quantity of the Cleveland Subsidiary Priority
Collateral held by Borrower as of the date hereof is 0 tons having a purchase
price of $0.
(ii) all amounts due from Borrower to Cleveland Subsidiary required
by Section 3(a) of the Pellet Sale Amendment have been paid in full;
(iii) Cleveland Subsidiary is the exclusive legal and beneficial
owner of all of the Cleveland Subsidiary Debt;
(iv) as of the date hereof, Cleveland Subsidiary has no actual
knowledge of any lien, security interest or other claim created by Cleveland
Subsidiary on the Cleveland Subsidiary Debt;
(v) this Intercreditor Agreement constitutes the legal, valid and
binding obligations of Cleveland Subsidiary, enforceable in accordance with its
terms.
(d) Revolving Loan Agent represents and warrants to the other Creditors
that:
(i) as of the close of business immediately prior to the date
hereof, the total principal amount of the Revolving Loan Debt as set forth in
the books and records of Revolving Loan Agent is $89,295,290 which amount is
provisional and subject to adjustment as a result of, among other things,
information received after the date hereof or as a result of bookkeeping or
accounting errors;
(ii) Revolving Loan Lenders are the exclusive legal and beneficial
owners of all of the Revolving Loan Debt, subject to certain participation
arrangements;
(iii) as of the date hereof, Revolving Loan Agent has no actual
knowledge of any lien, security interest or other claim created by Revolving
Loan Agent on the Revolving Loan Debt;
(iv) this Intercreditor Agreement constitutes the legal, valid and
binding obligations of Revolving Loan Agent, enforceable in accordance with its
terms.
4.3 Collateral Reporting. On and after the date hereof, Borrower shall
cause Cleveland Subsidiary, and Cleveland Subsidiary hereby agrees, to deliver
to Revolving Loan Agent weekly,
19
as soon as possible after the end of each week (but in any event within two (2)
Business Days after the end thereof) a written statement, substantially in the
form attached hereto as Exhibit A, duly completed and executed by the chief
financial officer or other appropriate financial officer of Cleveland Subsidiary
reasonably satisfactory to Revolving Loan Agent, which shall be completed as to
each applicable period, and include the following:
(a) a roll forward with respect to:
(i) the Cleveland Subsidiary Priority Collateral setting forth: (A)
the total dollar values and quantities of Cleveland Subsidiary Priority
Collateral shipped and delivered by Cleveland Subsidiary to Borrower under
Sections 3(b), (c) and (d) of the Pellet Sale Amendment (as in effect on the
date hereof) during the immediately preceding week, and (B) the total dollar
value and quantity of the Cleveland Subsidiary Priority Collateral as of the
last Business Day of the immediately preceding week,
(ii) the iron ore pellets shipped and delivered by Cleveland
Subsidiary to Borrower under Sections 3(b), (c) or (d) of the Pellet Sale
Amendment (as in effect on the date hereof) that have been paid for in full by
Borrower and accordingly have ceased to be Cleveland Subsidiary Priority
Collateral setting forth: (A) the total dollar values and quantities of the iron
ore pellets shipped and delivered by Cleveland Subsidiary to Borrower under
Sections 3(b), (c) and (d) of the Pellet Sale Amendment (as in effect on the
date hereof) that were paid for in full by Borrower during the immediately
preceding week, and (B) the total dollar value and quantity of such pellets as
of the last Business Day of the immediately preceding week, and
(iii) the iron ore pellets shipped and delivered by Cleveland
Subsidiary to Borrower under Section 3(e) of the Pellet Sale Amendment (as in
effect on the date hereof) that are owned by Borrower free and clear of any
claim, lien, security interest, retention of title or other encumbrance of
Cleveland Subsidiary, setting forth: (A) the total dollar values and quantities
of the iron ore pellets shipped and delivered by Cleveland Subsidiary to
Borrower under Section 3(e) of the Pellet Sale Amendment (as in effect on the
date hereof) during the immediately preceding week, and (B) the total dollar
value and quantity of such pellets as of the last Business Day of the
immediately preceding week; and
(b) the total amount of the Cleveland Subsidiary Inventory Payable as of
the last Business Day of the immediately preceding week,
(c) the agreement and confirmation of Cleveland Subsidiary that the
total dollar values and quantities of the iron ore pellets contained in such
report in accordance with Sections 4.3(a)(ii) and (iii) hereof are owned by
Borrower free and clear of any claim, lien, security interest, retention of
title or other encumbrance of Cleveland Subsidiary and are subject to the first
priority security interest of Revolving Loan Agent,
provided, that, at any time during the months of November, December, January,
February and March of each fiscal year, at Revolving Loan Agent's option,
Cleveland Subsidiary shall deliver
20
the information described above in this Section 4.3 to Revolving Loan Agent on a
daily basis for the immediately preceding day.
4.4 Waivers. Notice of acceptance hereof, the making of loans, advances and
extensions of credit or other financial accommodations to, and the incurring of
any expenses by or in respect of, any Debtor by any Revolving Loan Lender,
Cleveland, Cleveland Subsidiary or Ford, and presentment, demand, protest,
notice of protest, notice of nonpayment or default and all other notices to
which any Revolving Loan Lender, Cleveland, Cleveland Subsidiary, Ford or any
Debtor are or may be entitled are hereby waived (except as expressly provided
for herein or as to any Debtor, in the Agreements). Cleveland, Cleveland
Subsidiary and Ford also waive notice of, and hereby consent to, (a) any
amendment, modification, supplement, renewal, restatement or extensions of time
of payment of any of the Revolving Loan Debt or to the Revolving Loan Agreements
or any Collateral, other than the increase in the maximum amount of the
commitments of Revolving Loan Lenders to an amount greater than $200,000,000,
(b) the taking, exchange, surrender and releasing of Collateral or guarantees
now or at any time held by or available to any Revolving Loan Lender for the
Revolving Loan Debt or any other person at any time liable for or in respect of
the Revolving Loan Debt, (c) the exercise of, or refraining from the exercise of
any rights against any Debtor or any other obligor or any Collateral, (d) the
settlement, compromise or release of, or the waiver of any default with respect
to, any of the Revolving Loan Debt, and/or (e) any Revolving Loan Lender's
election, in any proceeding instituted under the U.S. Bankruptcy Code, of the
application of Section 1111(b)(2) of the U.S. Bankruptcy Code. Any of the
foregoing shall not, in any manner, affect the terms hereof or impair the
obligations of Cleveland or Ford hereunder. All of the Revolving Loan Debt shall
be considered as if made or incurred in reliance upon this Intercreditor
Agreement.
4.5 Subrogation; Marshalling. Upon the payment in full of the Revolving
Loan Debt, Cleveland shall be subrogated to the rights of Revolving Loan Lenders
to receive payments and distributions of cash, property or securities to which
the Revolving Loan Lenders would be entitled to receive in respect of the
Revolving Loan Debt until payment in full of all Cleveland Debt. Upon the
payment in full of the Cleveland Debt, Ford shall be subrogated to the rights of
Cleveland to receive payments and distributions of cash, property or securities
to which the Cleveland would be entitled to receive in respect of the Cleveland
Debt until payment in full of all Ford Debt. As between Debtors, their creditors
other than Revolving Loan Lenders, Cleveland, Cleveland Subsidiary and Ford, no
payment or distribution made to Revolving Loan Lenders by virtue of this
Agreement, which payment or distribution would otherwise have been made to
Cleveland, Cleveland Subsidiary or Ford, shall be deemed to be a payment by
Debtors on account of the Cleveland or Ford Debt, it being understood that the
provisions of this Intercreditor Agreement are intended solely for the purpose
of defining the relative rights of Revolving Loan Lenders, Cleveland, Cleveland
Subsidiary and Ford. If the Revolving Loan Lenders receive payment in full of
the Revolving Loan Debt at any time, and if at such time the Cleveland
Agreements, Cleveland Subsidiary Agreements and Ford Agreements and the security
interest in the Collateral under the Cleveland Agreements, Cleveland Subsidiary
Agreements and Ford Agreements shall be in effect, upon the written request of
Cleveland, Cleveland Subsidiary or Ford, and at the expense of such Creditor,
except as may otherwise be required by any order or requirement of any
governmental authority or applicable law, Revolving Loan Agent shall
21
forthwith assign and deliver, or cause to be assigned and delivered, to such
Creditor or any Person designated in writing to Revolving Loan Agent by such
Creditor, against acknowledgement of receipt thereof by such Creditor or such
designee, such of the Collateral, if any, as shall not have been sold or
otherwise applied to the Revolving Loan Debt by Revolving Loan Lenders pursuant
to the terms of the Revolving Loan Agreements and shall then be held by
Revolving Loan Agent thereunder (other than in satisfaction of any Revolving
Loan Debt), together with appropriate instruments of assignment and/or any
necessary endorsements (in form and substance satisfactory to Revolving Loan
Agent), whereupon Revolving Loan Lenders shall be discharged from any further
obligation with respect to the Collateral. Any such assignment and delivery
shall be without representation, warranty or recourse of any kind by any
Revolving Loan Lender to Cleveland, Cleveland Subsidiary and Ford or any person
claiming by, through or under Cleveland, Cleveland Subsidiary or Ford (including
any of their respective successors, assignees or designees) and otherwise on
terms and conditions acceptable to Revolving Loan Agent and each Debtor hereby
consents and agrees to such assignment and delivery. Ford hereby waives any and
all rights to have any Collateral or any part thereof granted to Revolving Loan
Agent marshalled upon any foreclosure or other disposition of such collateral by
Revolving Loan Agent or any Debtor.
4.6 No Offset.
(a) If at any time prior to the payment in full of the Revolving Loan
Debt, Cleveland, Cleveland Subsidiary or Ford has any obligation to pay money to
any Debtor, Cleveland, Cleveland Subsidiary and Ford hereby irrevocably agree,
solely for the benefit of Revolving Loan Lenders, that it shall not deduct from
or setoff against, or assert any defense, recoupment, suspension, claim,
abatement or counterclaim against, any amounts payable by such Junior Creditor
to any Debtor in respect of any amounts such Junior Creditor claims are due to
it with respect to its Junior Debt, Cleveland Subsidiary shall not deduct from
or setoff against, or assert any defense, recoupment, suspension, claim,
abatement or counterclaim against, any amounts payable by it to any Debtor in
respect of any amounts Cleveland claims are due it under the Cleveland Agreement
or otherwise, and Cleveland shall not deduct from or setoff against, or assert
any defense, recoupment, suspension, claim, abatement or counterclaim against,
any amounts payable by it to any Debtor in respect of any amounts Cleveland
Subsidiary claims are due it under the Cleveland Subsidiary Agreement or
otherwise. The foregoing shall not be construed as a waiver by Cleveland,
Cleveland Subsidiary or Ford of any claims, recourse to, or other rights of such
Junior Creditor against any Debtor but only as a limitation on the exercise by
such Junior Creditor of such rights of such Junior Creditor with respect to its
Junior Debt against amounts payable by such Junior Creditor to a Debtor until
the payment in full of the Revolving Loan Debt and (b) after payment in full of
the Revolving Loan Debt and at any time prior to the payment in full of the
Cleveland Debt, Ford has any obligation to pay money to any Debtor, Ford hereby
irrevocably agrees, solely for the benefit of Cleveland, that it shall not
deduct from or setoff against, or assert any defense, recoupment, suspension,
claim, abatement or counterclaim against, any amounts payable by Ford to any
Debtor in respect of any amounts Ford claims are due to it with respect to the
Ford Debt. The foregoing shall not be construed as a waiver by Ford of any
claims, recourse to, or other rights of Ford against any Debtor but only as a
limitation on
22
the exercise by Ford of such rights of Ford with respect to the Ford Debt
against amounts payable by Ford to a Debtor until the payment in full of the
Cleveland Debt.
4.7 Notice and Option to Cure; Amendment of Pellet Sale Agreement.
Revolving Loan Agent or any Revolving Loan Lender shall have the right, but not
the obligation, to cure any default or make any payment under the Pellet Sale
Agreement within ten (10) business days from the date on which Revolving Loan
Agent receives notice of such default and the requirement of such payment, as
applicable. Any payment made or act done by Revolving Loan Agent or any
Revolving Loan Lender to cure any such default shall not constitute an
assumption of the Pellet Sale Agreement or any obligations of any Debtor.
Cleveland Subsidiary hereby agrees that, after the date hereof, it shall not
amend, modify, alter or change, without the prior written consent of Agent: (1)
the Cleveland Subsidiary PMSI Agreement (as in effect on the date hereof), or
(2) Section 3 of the Pellet Sale Amendment (as in effect on the date hereof)
provided, that, Cleveland Subsidiary may amend, modify, alter or change payment
dates or the method of payment set forth in Section 3 of the Pellet Sale
Amendment, or (3) any terms or conditions of the Pellet Sale Agreement (as in
effect on the date hereof) which relate to any security interest, lien, transfer
or retention of title or other encumbrance in favor of Cleveland Subsidiary or
its affiliates, or affect the rights and remedies of Revolving Loan Agent or
Revolving Loan Lenders with respect to any assets or properties of Debtors or
otherwise.
5. MISCELLANEOUS
5.1 Amendments. Any waiver, permit, consent or approval by any Creditor of
or under any provision, condition or covenant to this Intercreditor Agreement
must be in writing signed by such Creditor and shall be effective only to the
extent it is set forth in writing and as to the specific facts or circumstances
covered thereby. Any amendment of this Intercreditor Agreement must be in
writing and signed by each of the parties to be bound thereby.
5.2 Successors and Assigns.
(a) This Intercreditor Agreement shall be binding upon the parties
hereto and their respective successors and assigns and shall inure to the
benefit of each Creditor and its respective successors, participants and
assigns.
(b) Each Revolving Loan Lender and Ford reserves the right to grant
participations in, or otherwise sell, assign, transfer or negotiate all or any
part of, or any interest in, such Creditor's portion of the Debt; provided,
that, (i) no other Creditor shall be obligated to give any notices to or
otherwise in any manner deal directly with any participant in the Revolving Loan
Debt or the Ford Debt and no participant shall be entitled to any rights or
benefits under this Intercreditor Agreement except through the Creditor with
whom it is a participant, (ii) in connection with any participation or other
transfer or assignment, the Creditor may disclose to such assignee, participant
or other transferee or assignee all documents and information which such
Creditor now or hereafter may have relating to Debtors and the obligations owing
to it and shall disclose to such participant or other transferee or assignee the
existence and terms and conditions of this Intercreditor Agreement, (iii) each
Revolving Loan
23
Lender and Ford shall give notice to the other Creditors of the assignment of
any of such Creditor's portion of the Debt or the granting of any participation
by such Creditor in any of such Creditor's portion of the Debt, provided, that,
the failure of a Creditor to send such notice to the other, shall not give rise
to any liability to the other and (iv) any sale, assignment, transfer or
negotiation of any interest in the Ford Debt shall be subject to the terms of
Section 4.1(d) hereof.
(c) Cleveland, Cleveland Subsidiary and Ford agree to execute and
deliver an agreement containing terms substantially identical to those contained
herein in favor of any third person who refinances or succeeds to or replaces
any or all of the Revolving Loan Debt, whether such successor financing or
replacement occurs by transfer, assignment, "takeout" or any other means or
vehicle.
5.3 Insolvency. This Intercreditor Agreement shall be applicable both
before and after the filing of any petition by or against any Debtor under the
U.S. Bankruptcy Code and all converted or succeeding cases in respect thereof,
and all references herein to any Debtor shall be deemed to apply to a trustee
for such Debtor and such Debtor as debtor-in-possession. The relative rights of
Revolving Loan Lenders, Cleveland, Cleveland Subsidiary and Ford to repayment of
the Revolving Loan Debt, the Cleveland Debt, Cleveland Subsidiary Debt and the
Ford Debt, respectively, and in or to any distributions from or in respect of
any Debtor or any Collateral or proceeds of any Collateral, shall continue after
the filing thereof on the same basis as prior to the date of the petition,
subject to any court order approving the financing of, or use of cash collateral
by, such Debtor as debtor-in-possession.
5.4 Bankruptcy Financing. If any Debtor shall become subject to a
proceeding under the U.S. Bankruptcy Code and if the Senior Creditor desires to
permit the use of cash collateral or to provide financing to such Debtor under
either Section 363 or Section 364 of the U.S. Bankruptcy Code, each Junior
Creditor agrees as follows: (a) adequate notice to each Junior Creditor shall
have been provided for such financing or use of cash collateral if each Junior
Creditor receives notice promptly following the filing of any motion seeking
approval thereof and no later than two (2) business days prior to the hearing
requesting entry of the order approving such financing or use of cash collateral
and (b) no objection will be raised by each Junior Creditor to any such
financing or use of cash collateral unless there shall be a failure to provide
"adequate protection" for such Junior Creditor's junior Liens on the Collateral
or any terms thereof shall be unreasonable or otherwise vary materially from
then market terms. For purposes of this Section, notice of a proposed financing
or use of cash collateral shall be deemed given when given in the manner
prescribed by Section 5.5 hereof.
5.5 Notices. All notices, requests and demands to or upon the respective
parties hereto shall be in writing and shall be deemed duly given, made or
received: (a) if delivered in person, immediately upon delivery; (b) if by
facsimile transmission, immediately upon the effectiveness of delivery of a copy
thereof pursuant to clause (a) or clause (c) hereof; and (c) if by nationally
recognized overnight courier service with instructions to deliver the next
business day, one (1) business day after sending; in each case, to the parties
at their addresses set forth below (or to such other addresses as the parties
may designate in accordance with the provisions of this Section):
24
To Revolving Loan
Creditors: Congress Financial Corporation, as Agent
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxxxx X. Xxxxx
Facsimile No.: 000-000-0000
To Cleveland: Cleveland-Cliffs Inc
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Secretary
Facsimile No.: 000-000-0000
To Ford: Ford Motor Company
Xxx Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxx Xxxxxx
Facsimile No.: 000-000-0000
with a copy to: Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Facsimile No.: 212-450-3800
To Cleveland Subsidiary: The Cleveland-Cliffs Iron Company
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Secretary
Facsimile No.:
To Borrower: Rouge Steel Company
0000 Xxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
Telephone No.: 000-000-0000
Telecopy No.: 000-000-0000
Borrower, Ford, Cleveland Subsidiary, Cleveland or Revolving Loan Agent may
change the address(es) to which all notices, requests and other communications
are to be sent by giving written notice of such address change to the other
Creditors in conformity with this Section 5.5, but such change shall not be
effective until notice of such change has been received by the other Creditors.
25
5.6 Counterparts; Effectiveness. This Intercreditor Agreement may be
executed in any number of counterparts, each of which shall be an original with
the same force and effect as if the signatures thereto and hereto were upon the
same instrument. Delivery of an executed counterpart of a signature page to this
Intercreditor Agreement by facsimile shall be effective as delivery of a
manually executed counterpart of this Intercreditor Agreement. This
Intercreditor Agreement shall become effective as of the date hereof with
respect to Revolving Loan Agent, Ford, Cleveland, Cleveland Subsidiary and
Debtors when each such party (or Borrower for itself and the other Debtors)
shall have received a counterpart hereof signed by each other such party.
5.7 Governing Law. The validity, construction and effect of this
Intercreditor Agreement shall be governed by the internal laws of the State of
New York, but excluding any principles of conflicts of law or any other rule of
law that would result in the application of the law of any jurisdiction other
than the laws of the State of New York.
5.8 CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL. EACH OF THE PARTIES
HERETO HEREBY IRREVOCABLY CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF THE
SUPREME COURT OF THE STATE OF NEW YORK IN NEW YORK COUNTY AND THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK SITTING IN NEW YORK CITY
AND WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH RESPECT TO THIS
INTERCREDITOR AGREEMENT. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY
CLAIM THAT ANY PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. EACH OF THE PARTIES HERETO IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN THIS INTERCREDITOR
AGREEMENT.
5.9 Complete Agreement. This written Intercreditor Agreement is intended by
the parties as a final expression of their agreement and is intended as a
complete statement of the terms and conditions of their agreement.
5.10 No Third Parties Benefitted. Except as expressly provided in Section
5.2(c) hereof, this Intercreditor Agreement is solely for the benefit of the
Creditors and their respective successors, participants and assigns, and no
other person shall have any right, benefit, priority or interest under, or
because of the existence of, this Intercreditor Agreement.
5.11 Disclosures; Non-Reliance. Each Creditor has the means to, and shall
in the future remain, fully informed as to the financial condition and other
affairs of any Debtor and no Creditor shall have any obligation or duty to
disclose any such information to any other Creditor. Except as expressly set
forth in this Intercreditor Agreement, the parties hereto have not otherwise
made to each other nor do they hereby make to each other any warranties, express
or implied, nor do they assume any liability to each other with respect to: (i)
the enforceability, validity, value or collectability of any of the Ford Debt,
Cleveland Subsidiary Debt, Cleveland Debt or Revolving Loan Debt or any
guarantee or security which may have been granted to any
26
of them in connection therewith, (b) any Debtor's title to or right to transfer
any of the Collateral, or (c) any other matter except as expressly set forth in
this Intercreditor Agreement.
5.12 Term. This Intercreditor Agreement is a continuing agreement and shall
remain in full force and effect until payment in full of all Revolving Loan Debt
and payment in full of the Cleveland Debt.
5.13 Amendment and Restatement. As of the date hereof, the terms,
conditions, agreements, covenants, representations and warranties set forth in
the Intercreditor and Subordination Agreement, dated as of November 21, 2001, by
and among Revolving Loan Agent and Ford are hereby amended and restated in their
entirety, and as so amended and restated, replaced and superseded, by the terms,
conditions, agreements, covenants, representations and warranties set forth in
this Intercreditor Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
27
IN WITNESS WHEREOF, the parties have caused this Intercreditor Agreement to
be duly executed as of the day and year first above written.
CONGRESS FINANCIAL CORPORATION,
as Agent
By:
-----------------------------
Title:
----------------------------
CLEVELAND-CLIFFS INC
By:
-----------------------------
Title:
----------------------------
FORD MOTOR COMPANY
By:
-----------------------------
Title:
----------------------------
THE CLEVELAND-CLIFFS IRON COMPANY
By:
-----------------------------
Title:
----------------------------
Each of the undersigned hereby acknowledges and agrees to the foregoing
terms and provisions. By its signature below, each of the undersigned agrees
that it will, together with its successors and assigns, be bound by the
provisions hereof.
Each of the undersigned acknowledges and agrees that: (i) although it may
sign this Intercreditor Agreement, it is not a party hereto and does not and
will not receive any right, benefit, priority or interest under or because of
the existence of the foregoing Intercreditor Agreement, (ii) in the event of a
breach by either of the undersigned, Cleveland, Cleveland Subsidiary or Ford of
any of the terms and provisions contained in the foregoing Intercreditor
Agreement, such a breach shall constitute an "Event of Default" as defined in
and under the Revolving Loan Agreements and (iii) it will execute and deliver
such additional documents and take such additional action as may be necessary or
desirable in the opinion of any Creditor to effectuate the provisions and
purposes of the foregoing Intercreditor Agreement.
28
Each of the undersigned agrees that any Creditor holding Collateral does so
as bailee (under the UCC) for the other and is hereby authorized to and may turn
over to such other Creditor upon request therefor any such Collateral, after all
obligations and indebtedness of the undersigned to the bailee Creditor have been
fully paid and performed.
ROUGE STEEL COMPANY
By:
-----------------------------
Title:
----------------------------
ROUGE INDUSTRIES, INC.
By:
-----------------------------
Title:
----------------------------
QS STEEL INC.
By:
-----------------------------
Title:
----------------------------
EVELETH TACONITE COMPANY
By:
-----------------------------
Title:
----------------------------
29
