EXHIBIT 99.2
SUBORDINATED LOAN AND SECURITY AGREEMENT
by and among
ROUGE STEEL COMPANY,
as Borrower
and
ROUGE INDUSTRIES, INC.
QS STEEL INC.
EVELETH TACONITE COMPANY,
as Guarantors
and
FORD MOTOR COMPANY,
as Lender
Dated: November 21, 2001
TABLE OF CONTENTS
PAGE
----
1. Loan Facility . . . . . . . . . . . . . . . . . . . . . . . . . .1
2. Intercreditor Agreement . . . . . . . . . . . . . . . . . . . . .1
3. Conditions to Borrowing . . . . . . . . . . . . . . . . . . . . .1
4. Borrowing Procedure . . . . . . . . . . . . . . . . . . . . . . .2
5. Terms of Loans. . . . . . . . . . . . . . . . . . . . . . . . . .2
6. Guarantees. . . . . . . . . . . . . . . . . . . . . . . . . . . .3
7. Grant of Security Interest. . . . . . . . . . . . . . . . . . . .3
8. Incorporation by Reference. . . . . . . . . . . . . . . . . . . .3
9. Increased Costs; Indemnity. . . . . . . . . . . . . . . . . . . .4
10. Representations and Warranties. . . . . . . . . . . . . . . . . .4
11. Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
12. Events of Default; Remedies . . . . . . . . . . . . . . . . . . .4
13. Successors and Assigns; Amendments. . . . . . . . . . . . . . . .6
14. Counterparts; Effectiveness . . . . . . . . . . . . . . . . . . .7
15. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . .7
16. GOVERNING LAW; JURISDICTION . . . . . . . . . . . . . . . . . . .7
17. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . .7
INDEX TO SCHEDULES
Schedule A -- Initial Borrowing Notice
Schedule B -- Borrowing Notice
Schedule C -- Guarantees
Schedule D -- Description of Collateral
Schedule E -- Disclosure Schedule
SUBORDINATED LOAN AND SECURITY AGREEMENT
This Subordinated Loan and Security Agreement (as it may be amended
from time to time, this "Agreement") is entered into as of November 21, 2001,
by and among Rouge Steel Company, a Delaware corporation (the "BORROWER"), Rouge
Industries, Inc., a Delaware corporation ("RII"), QS Steel Inc., a Michigan
corporation ("QS"), Eveleth Taconite Company, a Minnesota corporation
("EVELETH", and together with RII and QS, the "GUARANTORS"), and Ford Motor
Company, a Delaware corporation (the "LENDER").
1. Loan Facility. (a) The Borrower may from time to time request the
Lender to make loans hereunder ("LOANS") from time to time prior to March 29,
2002 (the "FACILITY TERMINATION DATE"), and in order to induce the Lender to
make Loans, the Borrower and the Guarantors are entering into this agreement to
provide for a grant of security interests in the Collateral and for the
guarantees of the Guarantors of the obligations of the Borrower hereunder. Any
Loans made shall be governed by and entitled to the benefits of this Agreement
and the other Facility Agreements.
(b) The Lender hereby agrees to make (i) a Loan on the date
hereof (the "INITIAL LOAN") in an aggregate principal amount not to exceed
$10,000,000 and (ii) from time to time on any Business Day during the period
commencing on November 26, 2001 until the Facility Termination Date, up to one
Loan per calendar week, each in a principal amount not to exceed $10,000,000. In
no event, however, shall the aggregate principal amount of Loans hereunder
exceed $75,000,000.
(c) The proceeds of Loans shall be used for working capital
and other operating needs. The holder of the promissory note of the Borrower
executed in connection with this Agreement (the "NOTE") is authorized to endorse
on the schedule attached thereto, or on any continuation of such schedule, the
date, amount, borrowing period, interest rate, payment and remaining balance of
all Loans.
2. Intercreditor Agreement. The rights and obligations of the parties
hereto are subject to the provisions of the Intercreditor Agreement, and in the
event of any inconsistency between the provisions hereof and thereof, the
provisions of the Intercreditor Agreement shall prevail.
3. Conditions to Borrowing. The obligation of the Lender to make any
Loan hereunder is subject to the satisfaction of the following conditions:
(a) The Lender shall have received a duly completed Borrowing Notice
in accordance with Section 4;
(b) No Default shall have occurred and be continuing; and
(c) All representations and warranties of the Borrower as set forth in
this Agreement shall be true and correct, in all material respects.
4. Borrowing Procedure. The Borrower shall submit, on the date hereof,
a borrowing notice in substantially the form of Schedule A hereto (the "INITIAL
BORROWING NOTICE "). Following the date hereof, if the Borrower wishes to
request a Loan hereunder, it shall submit to the Lender, not less than two
Business Days prior to the requested date of borrowing, a duly completed
Borrowing Notice in substantially the form of Schedule B hereto (a "BORROWING
NOTICE"), signed by a duly authorized officer of the Borrower. On the borrowing
date, the Lender will make the amount of the Loan available to the Borrower in
accordance with the funding instructions set forth in the Borrowing Notice. The
Borrower shall not request more than one Loan in any calendar week.
5. Terms of Loans. (a) Each Loan shall mature, and the principal amount
thereof shall be due and payable, on the Facility Termination Date.
(b) (i) The principal amount of each Loan from time to time
outstanding shall bear interest for each day during each Interest Period at a
rate per annum equal to the LIBOR Rate determined for such Interest Period plus
the LIBOR Margin for such day.
(ii) If all or a portion of the principal amount of any
Loan or any interest payable thereon shall not be paid when due (whether at the
stated maturity, by acceleration or otherwise), such overdue amount shall bear
interest at a rate per annum, which is the rate that would otherwise be
applicable thereto pursuant to the foregoing provisions of this Section plus 2%,
in each case from the date of such non-payment until such amount is paid in full
(as well after as before any judgment).
(iii) Interest shall be payable in arrears on the Facility
Termination Date. Interest shall be calculated on the basis of a 360-day year
for the actual days elapsed.
(c) The Borrower may, at any time and from time to time,
prepay the Loans, in whole or in part, without premium or penalty, upon at least
three Business Days' irrevocable written notice to the Lender.
(d) The Borrower agrees to indemnify the Lender and to hold
the Lender harmless from any loss or expense which the Lender may sustain or
incur as a consequence of (i) default by the Borrower in payment when due of the
principal amount of or interest on any Loan, (ii) default by the Borrower in
2
making a borrowing after the Lender has given a notice accepting a request for
the same in accordance with the provisions of this Agreement or (iii) default by
the Borrower in making any prepayment after the Borrower has given a notice
thereof in accordance with the provisions of this Agreement, including, without
limitation, in each case, any such loss or expense arising from the reemployment
of funds obtained by the Lender or from fees payable to terminate the deposits
from which such funds were obtained. This covenant shall survive the termination
of this Agreement and the payment of the Loans and all other amounts payable
hereunder.
6. Guarantees. Each of the Guarantors hereby irrevocably and
unconditionally guarantees to the Lender payment of each and every Obligation of
the Borrower on the terms more fully set forth in Schedule C.
7. Grant of Security Interest. (a) To secure payment and performance
of all Obligations, the Borrower and each Guarantor hereby grants to the Lender
a continuing security interest in, a lien upon, and a right of set off against,
and hereby assigns to the Lender, as security, the property and interests in
property of the Borrower and such Guarantor, whether now owned or hereafter
acquired or existing, and wherever located, in the Collateral described in
Schedule D.
(b) Notwithstanding anything to the contrary contained in
Section 7(a) above, the types or items of Collateral described in such Section
shall not include any rights or interest in any contract, lease, permit,
license, charter or license agreement covering real or personal property of the
Borrower or any Guarantor, as such, if under the terms of such contract, lease,
permit, license, charter or license agreement, or applicable law with respect
thereto, the valid grant of a security interest or lien therein to the Lender is
prohibited as a matter of law or under the terms of such contract, lease,
permit, license, charter or license agreement and such prohibition has not been
or is not waived or the consent of the other party to such contract, lease,
permit, license, charter or license agreement has not been or is not otherwise
obtained; provided that the foregoing exclusion shall in no way be construed (i)
to apply if any such prohibition is unenforceable under Section 9-406 of the UCC
or other applicable law or (ii) so as to limit, impair or otherwise affect the
Lender's unconditional continuing security interests in and liens upon any
rights or interests of the Borrower or any Guarantor in or to monies due or to
become due under any such contract, lease, permit, license, charter or license
agreement.
8. Incorporation by Reference. Certain provisions (the "INCORPORATED
PROVISIONS") contained in this Agreement are incorporated by reference from or
defined with reference to the Loan and Security Agreement dated March 13, 2001
by and among the Borrower, the Guarantors, the lenders referred to therein and
Congress Financial Corporation, as agent (as amended on or prior to the date
hereof and, subject to the further provisions of this Section 8, as the same
may
3
be further amended from time to time hereafter, the "INCORPORATED AGREEMENT")
solely for the convenience of the parties hereto in documenting this Agreement
and the transactions referred to herein. Each such Incorporated Provision shall
be incorporated or referred to as though all references therein to the
"Agreement" and any "Note(s)", and all references to the "Agent," the "Lenders"
and the "Required Lenders" were references to this Agreement, the Note and to
the Lender, respectively, and other changes shall be made (as required by the
context) so that such Incorporated Provisions are made solely for the benefit of
the Lender with respect to this Agreement. No Incorporated Provision shall be
amended, waived or otherwise modified after the date hereof for purposes of this
Agreement by any amendment, waiver or other modification by the parties to the
Incorporated Agreement without the agreement of the Lender, and such
Incorporated Provisions shall remain in effect hereunder as they existed prior
to such amendment, waiver or modification not agreed to by the Lender. If this
Agreement remains in effect after the commitments under the Incorporated
Agreement have been terminated and the loans thereunder have been paid in full,
the Incorporated Provisions shall continue to be incorporated herein by
reference (and, without limitation, the covenants incorporated herein shall
continue to be in full force and effect) as set forth above as such provisions
were in effect on the date of such termination and repayment, without regard to
any amendment, waiver or other modification not agreed to by the Lender
hereunder.
9. Increased Costs; Indemnity. The Lender shall be entitled to the
benefits of (i) Section 3.3 of the Incorporated Agreement as if each Loan were a
Eurodollar Rate Loan as defined in the Incorporated Agreement and (ii) Section
11.5 of the Incorporated Agreement.
10. Representations and Warranties. The Borrower represents and
warrants that each of the representations and warranties set forth in Section 8
of the Incorporated Agreement is true and correct in all material respects on
and as of the date hereof (except as set forth in the Disclosure Schedule
attached as Schedule E hereto), and all such representations and warranties are
hereby incorporated by reference into this Agreement.
11. Covenants. Unless compliance shall have been waived in writing by
the Lender, the Borrower and each Guarantor will comply with each covenant
contained in Section 9 of the Incorporated Agreement, and all such covenants are
hereby incorporated by reference into this Agreement; provided that Section
9.3(e) of the Incorporated Agreement shall not apply to the Borrower to the
extent that the Lender has any existing obligation to indemnify the Borrower
with respect to any losses, claims, damages, liabilities, costs and expenses
arising from the events described in such Section 9.3(e).
12. Events of Default; Remedies. (a) If any of the following events
("EVENTS OF DEFAULT") shall occur and be continuing: (i) the Borrower shall fail
to
4
make payment when due of any principal of or interest on a Loan; or (ii)
any "Event of Default" set forth in Section 10 of the Incorporated Agreement
shall have occurred and be continuing, and all such "Events of Default" are
hereby incorporated by reference into this Agreement; then, in the case of any
of the Events of Default specified above, the Lender may, by written notice to
the Borrower, declare all Loans and other indebtedness hereunder to become
immediately due and payable, together with accrued interest and any other
charges, without presentment, demand, protest, or other notice, all of which are
hereby expressly waived, except that if an Event of Default described in Section
10.1(f), 10.1(g) or 10.1(h) of the Incorporated Agreement shall occur, such
indebtedness shall automatically become due and payable, without presentment,
demand, protest or other notice, all of which are hereby expressly waived.
(b) At any time an Event of Default has occurred and is
continuing, the Lender shall have all rights and remedies provided in this
Agreement, the other Financing Agreements, the UCC and other applicable law, all
of which rights and remedies may be exercised without notice to or consent by
the Borrower or any Guarantor, except as such notice or consent is expressly
provided for hereunder or required by applicable law. All rights, remedies and
powers granted to the Lender hereunder, under any of the other Financing
Agreements, the UCC or under other applicable law are cumulative, not exclusive,
and enforceable, in the Lender's discretion, alternatively, successively or
concurrently on any one or more occasions, and shall include, without
limitation, the right to apply to a court of equity for an injunction to
restrain a breach or threatened breach by Borrower of this Agreement or any of
the other Financing Agreements. The Lender may proceed directly against Borrower
or any Guarantor without prior recourse to the Collateral.
(c) Without limiting the foregoing, at any time an Event of
Default has occurred and is continuing, the Lender may, in its discretion, (i)
with or without judicial process or the aid or assistance of others, enter upon
any premises on or in which any of the Collateral may be located and take
possession of the Collateral or complete processing, manufacturing and repair of
all or any portion of the Collateral, (ii) require the Borrower or any
Guarantor, at the Borrower's expense, to assemble and make available to the
Lender any part or all of the Collateral at any place and time designated by the
Lender, (iii) collect, foreclose, receive, appropriate, set off and realize upon
any and all of the Collateral, (iv) remove any or all of the Collateral from any
premises on or in which the same may be located for the purpose of effecting the
sale, foreclosure or other disposition thereof or for any other purpose and/or
(v) sell, lease, transfer, assign, deliver or otherwise dispose of any and all
of the Collateral (including entering into contracts with respect thereto,
public or private sales at any exchange, broker's board, at any office of the
Lender or elsewhere) at such prices or terms as the Lender may deem reasonable,
for cash, upon credit or for future delivery, with the Lender having the right
to purchase the whole or any part
5
of the Collateral at any such public sale, all of the foregoing being free from
any right or equity of redemption of the Borrower or any Guarantor, which right
or equity of redemption is hereby expressly waived and released by the Borrower
and each Guarantor. If any of the Collateral is sold or leased by the Lender
upon credit terms or for future delivery, the Obligations shall not be reduced
as a result thereof until payment therefor is finally collected by the Lender.
If notice of disposition of Collateral is required by law, ten (10) days prior
notice by the Lender to the Borrower designating the time and place of any
public sale or the time after which any private sale or other intended
disposition of Collateral is to be made, shall be deemed to be reasonable notice
thereof and the Borrower and each Guarantor waive any other notice. In the event
the Lender institutes an action to recover any Collateral or seeks recovery of
any Collateral by way of prejudgement remedy, the Borrower and each Guarantor
waives the posting of any bond which might otherwise be required.
(d) For the purpose of enabling the Lender to exercise the
rights and remedies hereunder, the Borrower and each Guarantor hereby grants to
the Lender, to the extent assignable, an irrevocable, non-exclusive license
(exercisable at any time any Event of Default shall have occurred and for so
long as the same is continuing) without payment of royalty or other compensation
to the Borrower or any Guarantor, to use, assign, license or sublicense any of
the trademarks, service-marks, trade names, business names, trade styles,
designs, logos and other source of business identifiers and other intellectual
property and general intangibles now owned or hereafter acquired by the Borrower
or any Guarantor, wherever the same may be located, including in such license
reasonable access to all media in which any of the licensed items may be
recorded or stored and to all computer programs used for the compilation or
printout thereof; provided that such license shall terminate on the date that
the Lender has received final and indefeasible payment and satisfaction in full
of all of the Obligations.
(e) The Lender may apply the cash proceeds of Collateral
actually received by the Lender from any sale, lease, foreclosure or other
disposition of the Collateral to payment of the Obligations, in whole or in part
in such order as the Lender may elect, whether or not then due. The Borrower and
the Guarantors shall remain liable to the Lender for the payment of any
deficiency with interest at the highest rate provided for herein and all costs
and expense of collection and enforcement, including attorney's fees and
expenses.
13. Successors and Assigns; Amendments. (a) This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that neither the Borrower nor any Guarantor may
transfer or assign any of its rights or interests hereunder without the prior
written consent of the Lender.
6
(b) Neither this Agreement nor the Note may be amended or
modified, except pursuant to a writing signed by each of the parties hereto.
14. Counterparts; Effectiveness. This Agreement may be executed in
any number of counterparts, and such counterparts taken together shall
constitute one and the same instrument. Delivery of an executed counterpart of a
signature page to this Agreement by facsimile shall be effective as delivery of
a manually executed counterpart of this Agreement. This Agreement shall become
effective as of the date hereof with respect to Lender and the Borrower when
each such party shall have received a counterpart hereof signed by each other
such party, notwithstanding that any Guarantor shall not have executed a
counterpart hereof at such time. This Agreement shall become effective as of the
date hereof with respect to any Guarantor who shall execute a counterpart hereof
when the Lender, the Borrower and such Guarantor shall have executed a
counterpart hereof.
15. Miscellaneous. (a) Any waiver of any kind or character on the
part of the Lender in respect of this Agreement must be in writing and shall be
effective only to the extent specifically set forth in such writing. No delay on
the part of the Lender in exercising any of its powers or rights, and no partial
or single exercise, shall constitute a waiver thereof.
(b) Any notice to be given under this Agreement shall be in
writing and shall be deemed to have been duly given when received by the
recipient.
16. GOVERNING LAW; JURISDICTION. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. EACH OF THE
BORROWER AND EACH GUARANTOR HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF
ANY NEW YORK STATE COURT SITTING IN NEW YORK CITY FOR PURPOSES OF ALL LEGAL
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT. EACH OF THE BORROWER
AND EACH GUARANTOR IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF
ANY SUCH PROCEEDING BROUGHT IN SUCH COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING
BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. THE PARTIES
HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
17. Definitions. (a) As used in this Agreement the following terms
shall have the following meanings:
7
"BUSINESS DAY" shall mean a day other than a Saturday, Sunday or other
day on which commercial banks in New York City or Detroit, Michigan are
authorized or required by law to close and, if the applicable Business Day
relates to determination of a LIBOR Rate, on which dealings are carried on in
the London interbank market.
"DEFAULT" means any Event of Default or event or condition which, with
the giving of notice or the passage of time or both, could become an Event of
Default.
"DOLLARS" and "$" shall mean dollars in lawful currency of the United
States of America.
"FINANCING AGREEMENTS" means this Agreement, the Note and any other
agreement, document or instrument now or at any time hereafter executed and/or
delivered by or on behalf of the Borrower or any Guarantor in connection with
this Agreement.
"INTERCREDITOR AGREEMENT" means the Intercreditor and Subordination
Agreement dated as of November 21, 2001 by and between the Agent under the
Incorporated Agreement and the Lender.
"INTEREST PERIOD" shall mean, initially the period beginning on the
date hereof and ending December 31, 2001 and subsequently the period beginning
January 1, 2002 and ending on the Facility Termination Date.
"LIBOR MARGIN" means a rate per annum equal to 2.25% (or, if greater,
the Applicable Margin at the time in effect for Euro Dollar Rate Loans under the
Incorporated Agreement).
"LIBOR RATE" means, with respect to any Interest Period, the London
Interbank Offered Rate for deposits in Dollars for a period of three months
which appears on the Telerate Page 3750 as of 11:00 A.M., London time, two
Business Days prior to the first day of such Interest Period (or, in the case of
the initial Interest Period, two Business Days prior to November 1, 2001). If
for any reason the LIBOR Rate for any Interest Period may not be determined as
aforesaid, the LIBOR Rate for such Interest Period shall be the Prime Rate in
effect on the first day of such Interest Period.
"OBLIGATIONS" means any and all Loans and all other obligations,
liabilities and indebtedness of every kind, nature and description owing by the
Borrower or any Guarantor to the Lender and/or any of its affiliates, including
principal, interest, charges, fees, costs and expenses, however evidenced,
whether as principal, surety, endorser, guarantor or otherwise, arising under
this
8
Agreement or any of the other Financing Agreements, whether now existing
or hereafter arising, whether arising before, during or after the initial or any
renewal terms of this Agreement or after the commencement of any case with
respect to the Borrower or any Guarantor under the United States Bankruptcy Code
or any similar statute (including the payment of interest 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 such case),
whether direct or indirect, absolute or contingent, joint or several, due nor
not due, primary or secondary, liquidated or liquidated, secured or unsecured,
and however acquired by the Lender.
"PRIME RATE" means the rate of interest publicly announced by JPMorgan
Chase Bank, or its successors, in New York City from time to time as its prime
rate.
"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.
(b) The following terms defined elsewhere in this Agreement
have the meanings set forth in the respective sections indicated below:
Defined Term Defined In Section
------------ ------------------
"BORROWING NOTICE" 4
"EVENTS OF DEFAULT" 12(a)
"FACILITY TERMINATION DATE" 1(a)
"INCORPORATED AGREEMENT" 8
"INCORPORATED PROVISIONS 8
"INITIAL BORROWING NOTICE" 4
-
"INITIAL LOAN" 1(b)
"LOANS" 1(a)
"NOTE" 1(c)
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
BORROWER
ROUGE STEEL COMPANY
By: /s/ Xxxx X. Xxxxxxxxxxx
-----------------------
Name: Xxxx X. Xxxxxxxxxxx
Title: Vice Chairman and CFO
Address for notices:
0000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Facsimile:
GUARANTORS
ROUGE INDUSTRIES, INC.
By: /s/ Xxxx X. Xxxxxxxxxxx
-----------------------
Name: Xxxx X. Xxxxxxxxxxx
Title: Vice Chairman and CFO
Address for notices:
0000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Facsimile:
QS STEEL, INC.
By: /s/ Xxxx X. Xxxxxxxxxxx
-----------------------
Name: Xxxx X. Xxxxxxxxxxx
Title: President
Address for notices:
0000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Facsimile:
EVELETH TACONITE COMPANY
By: /s/ Xxxx X. Xxxxxxxxxxx
-------------------------
Name: Xxxx X. Xxxxxxxxxxx
Title: President
Address for notices:
0000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Facsimile:
LENDER
FORD MOTOR COMPANY
By: /s/ Xxxxx X. Xxxxxx
--------------------
Name: Xxxxx X. Xxxxxx
Title: Assistant Treasurer
Address for notices:
Xxx Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Facsimile:
SCHEDULE A
INITIAL BORROWING NOTICE
Reference is made to the Subordinated Loan and Security Agreement dated
as of November 21, 2001 (as amended from time to time, the "AGREEMENT") among
Rouge Steel Company (the "BORROWER"), the Guarantors referred to therein and
Ford Motor Company, as Lender. Terms defined in the Agreement are used herein as
defined therein.
Pursuant to Section 4 of the Agreement, the undersigned hereby requests
the Initial Loan in the amount of $10,000,000 to be made on November 21, 2001.
After giving effect to such Initial Loan, the aggregate principal amount of the
Loans outstanding will be $10,000,000. The proceeds of such Initial Loan should
be made available to the Borrower by wire transfer to the following bank
account: __________________.
The undersigned, the title of the Borrower, hereby certifies, both on
and as of the date hereof (and giving effect to the Initial Loan) that:
1. No Default has occurred and is continuing;
2. The representations and warranties of the Borrower set forth in
the Agreement are true and correct, in all material respects; and
3. A Plan of Cash Disbursements setting forth the projected cash
disbursements to be made from the proceeds of the Loan requested hereby has been
delivered to Xxxxx Xxxxxx Xxxx, Inc. in a format reasonably satisfactory to
them.
IN WITNESS WHEREOF, the undersigned has caused this Borrowing Notice to
be duly executed as of the ___ day of November, 2001.
_________________________
Name:
Title:
A-1
SCHEDULE B
BORROWING NOTICE
Reference is made to the Subordinated Loan and Security Agreement dated
as of November 21, 2001 (as amended from time to time, the "AGREEMENT") among
Rouge Steel Company (the "BORROWER"), the Guarantors referred to therein and
Ford Motor Company, as Lender. Terms defined in the Agreement are used herein as
defined therein.
Pursuant to Section 4 of the Agreement, the undersigned hereby
requests a Loan in the amount of $__________ to be made on _______________.
After giving effect to such Loan, the aggregate principal amount of the Loans
outstanding will be $_____________. The proceeds of such Loan should be made
available to the Borrower by wire transfer to the following bank account:
__________________.
The undersigned, the ____________ of the Borrower, hereby certifies,
both on and as of the date hereof and on and as of the date of borrowing of the
Loan requested above (and after giving effect thereto) that:
1. No Default has occurred and is continuing;
2. The representations and warranties of the Borrower set forth in
the Agreement are true and correct, in all material respects;
3. A Variance Report setting forth all existing variances from the
Plan of Cash Disbursements submitted with the Borrowing Notice dated as of
________________ has been delivered to Xxxxx Xxxxxx Xxxx, Inc. ("SRR") in a
format reasonably satisfactory to them;
4. An Expenses Reduction Plan setting forth all projected reductions
in expenses of the Borrower and reductions in expenses of the Borrower from
November 21, 2001 until and including the date hereof has been delivered to
SRR in a format reasonably satisfactory to them; and
5. A Plan of Cash Disbursements setting forth the projected cash
disbursements to be made from the proceeds of the Loan requested hereby has been
delivered to SRR in a format reasonably satisfactory to them.
B-1
IN WITNESS WHEREOF, the undersigned has caused this Borrowing Notice to
be duly executed as of the ___ day of ______________, _____.
_________________________
Name:
Title:
B-2
SCHEDULE C
GUARANTEES
1. Guarantees. Subject to paragraph 3 below, the Guarantors hereby
jointly, severally, unconditionally and irrevocably guarantee to the Lender the
due and punctual payment of all present and future indebtedness of the Borrower
evidenced by or arising out of the Financing Agreements, including, but not
limited to, the due and punctual payment of principal of and interest on the
Loans and the due and punctual payment of all other sums now or hereafter owed
by the Borrower under any Financing Agreement as and when the same shall become
due and payable, whether at maturity, by declaration or otherwise, according to
the terms thereof. In case of failure by the Borrower punctually to pay the
indebtedness guaranteed hereby, the Guarantors, subject to paragraph 3 below,
hereby jointly, severally and unconditionally agree to cause such payment to be
made punctually as and when the same shall become due and payable, whether at
maturity or by declaration or otherwise, and as if such payment were made by the
Borrower.
2. Guarantees Unconditional. The obligations of each Guarantor
hereunder shall be unconditional and absolute and, without limiting the
generality of the foregoing, shall not be released, discharged or otherwise
affected by:
(a) any extension, renewal, settlement, compromise, waiver or
release in respect of any obligation of the Borrower or any other
Guarantor under any Financing Agreement, by operation of law or
otherwise;
(b) any modification or amendment of or supplement to any
Financing Agreement;
(c) any modification, amendment, waiver, release,
non-perfection or invalidity of any direct or indirect security, or of
any guarantee or other liability of any third party, for any obligation
of the Borrower or any other Guarantor under any Financing Agreement;
(d) any change in the corporate existence, structure or
ownership of any other Guarantor, or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting the Borrower or
any other Guarantor or its assets or any resulting release or discharge
of any obligation of the Borrower or any other Guarantor contained in
any Financing Agreement;
(e) the existence of any claim, set-off or other rights which
any Guarantor may have at any time against the Borrower or any other
Guarantor, the Lender or any other person, whether or not arising in
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connection with the Financing Agreements, provided that nothing herein
shall prevent the assertion of any such claim by separate suit or
compulsory counterclaim;
(f) any invalidity or unenforceability relating to or against
the Borrower or any other Guarantor for any reason of any Financing
Agreement, or any provision of applicable law or regulation purporting
to prohibit the payment by the Borrower or any other Guarantor of the
principal of or interest on any Note or any other amount payable by the
Borrower or any other Guarantor under the Financing Agreements; or
(g) any other act or omission to act or delay of any kind by
the Borrower or any other Guarantor, the Lender or any other person or
any other circumstance whatsoever (other than payment) that might, but
for the provisions of this paragraph, constitute a legal or equitable
discharge of or defense to the obligations of any Guarantor hereunder.
3. Limit of Liability. Each Guarantor shall be liable under this
Agreement only for amounts aggregating up to the largest amount that would not
render its obligations hereunder subject to avoidance under Section 548 of the
United States Bankruptcy Code or any comparable provisions of any applicable
state law.
4. Discharge; Reinstatement in Certain Circumstances. Each
Guarantor's obligations hereunder shall remain in full force and effect until
the principal of and interest on the Loans and all other amounts payable by the
Borrower under the Financing Agreements shall have been paid in full. If at any
time any payment of the principal of or interest on the Loan or any other amount
payable by the Borrower under any Financing Agreement is rescinded or must be
otherwise restored or returned upon the insolvency, bankruptcy or reorganization
of the Borrower or any other Guarantor or otherwise, each Guarantor's
obligations hereunder with respect to such payment shall be reinstated at such
time as though such payment had become due but had not been made at such time.
5. Waiver. Each Guarantor irrevocably waives acceptance hereof,
presentment, demand, protest and any notice not provided for herein, as well as
any requirement that at any time any action be taken by any person against any
other Guarantor or any other person.
6. Subrogation and Contribution. Each Guarantor irrevocably waives
any and all rights to which it may be entitled, by operation of law or
otherwise, upon making any payment hereunder (i) to be subrogated to the rights
of the payee against the Borrower with respect to such payment or otherwise to
be reimbursed, indemnified or exonerated by the Borrower in respect thereof or
(ii)
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to receive any payment, in the nature of contribution or for any other reason,
from any other Guarantor with respect to such payment.
7. Stay of Acceleration. If acceleration of the time for payment of
any amount payable by the Borrower under the Financing Agreements is stayed upon
the insolvency, bankruptcy or reorganization of the Borrower, all such amounts
otherwise subject to acceleration under the terms of the Financing Agreements
shall nonetheless be payable by each Guarantor hereunder forthwith on demand by
the Lender.
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SCHEDULE D
DESCRIPTION OF COLLATERAL
The following types (or items) of property of the Borrower or any
Guarantor are collectively referred to herein as the "COLLATERAL":
(a) (i) all present and future rights of the Borrower or any Guarantor
to payment for goods sold or leased or for services rendered, whether or not
evidenced by instruments or chattel paper, and whether or not earned by
performance (collectively, the "ACCOUNTS"); (ii) all amounts at any time payable
to the Borrower or any Guarantor in respect of the sale or other disposition by
the Borrower or such Guarantor of any Account or other obligation for the
payment of money; (iii) all interest, fees, late charges, penalties, collection
fees and other amounts due or to become due or otherwise payable in connection
with any Account; (iv) all letters of credit, indemnities, guarantees, security
or other deposits and proceeds thereof issued payable to the Borrower or any
Guarantor or otherwise in favor of or delivered to the Borrower or any Guarantor
in connection with any Account; and (v) all other contract rights, chattel
paper, instruments, notes, general intangibles and other forms of obligations
owing to the Borrower or any Guarantor, whether from the sale and lease of goods
or other property, licensing of any property (including intellectual property or
other general intangibles), rendition of services or from loans or advances by
the Borrower or any Guarantor or to or for the benefit of any third person
(including loans or advances to any affiliates or subsidiaries) or otherwise
associated with any Accounts, Inventory or general intangibles of the Borrower
or any Guarantor (including, without limitation, choses in action, causes of
action, tax refunds, tax refund claims, any funds which may become payable to
the Borrower or any Guarantor in connection with the termination of any employee
benefit plan and any other amounts payable to the Borrower or any Guarantor from
any employee benefit plan, rights and claims against carriers and shippers,
rights to indemnification, business interruption insurance and proceeds thereof,
casualty or any similar types of insurance and any proceeds thereof and proceeds
of insurance covering the lives of employees on which the Borrower or any
Guarantor is beneficiary) (all of the property and assets described in this
paragraph (a) being referred to herein collectively as "RECEIVABLES");
(b) all of the Borrower's and each Guarantor's present and future:
general intangibles (including, but not limited to, tax and duty refunds;
goodwill; licenses, whether as licensor or licensee; choses in action and other
claims and existing and future leasehold interests in real estate and fixtures;
patents, patent rights, patent applications, copyrights, works which are the
subject matter of copyrights, copyright registrations, trademarks, trade names,
trade styles, trademark and service xxxx applications, and licenses and rights
to use any of the foregoing; all extensions, renewals, reissues, divisions,
continuations, and continuations-in-part
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of any of the foregoing; all rights to xxx for past, present and future
infringement of any of the foregoing; inventions, trade secrets, formulae,
processes, compounds, drawings, designs, blueprints, surveys, reports, manuals,
and operating standards; customer and other lists in whatever form maintained;
trade secret rights, copyright rights, rights in works of authorship, and
contract rights relating to computer software programs, in whatever form created
or maintained; and interests in general partnerships (including Double Eagle
Steel Coating Company in the case of the Borrower) or limited liability
companies (including TWB Company L.L.C., Spartan Steel Casting, L.L.C. and
Delaco Processing L.L.C., in the case of QS, and Eveleth Mines L.L.C., in the
case of Eveleth)); chattel paper; documents; instruments; securities and other
investment property (including securities, whether certificated or
uncertificated, securities account, security entitlements, commodity contracts
or commodity accounts); letters of credit; bankers' acceptances and guarantees;
(c) all present and future: monies, securities, credit balances,
deposits, deposit accounts and other property of the Borrower or any Guarantor
now or hereafter held or received by or in transit to the Lender or its
affiliates or at any other depositary or other institution from or for the
account of the Borrower, whether for safekeeping, pledge, custody, transmission,
collection or otherwise, and all present and future liens, security interests,
rights, remedies, title and interest in, to and in respect of Receivables and
other Collateral, including, without limitation, rights and remedies under or
relating to guarantees, contracts of suretyship, letters of credit and credit
and other insurance related to the Collateral, rights of stoppage in transit,
replevin, repossession, reclamation and other rights and remedies of an unpaid
vendor, lienor or secured party, goods described in invoices, documents,
contracts or instruments with respect to, or otherwise representing or
evidencing, Receivables or other Collateral, including, without limitation,
returned, repossessed and reclaimed goods, and deposits by and property of
account debtors or other persons securing the obligations of account debtors;
(d) all of the Borrower's and each Guarantor's present and future: raw
materials, work in process, semi-finished goods, finished goods and all other
inventory of whatsoever kind or nature, wherever located (collectively,
"INVENTORY");
(e) all of the Borrower's present and future: real property, including
leasehold interests, together with all buildings, structures, and other
improvements located thereon and all licenses, easements and appurtenances
relating thereto, wherever located;
(f) all of the Borrower's and each Guarantor's present and future:
books of account of every kind or nature, purchase and sale agreements,
invoices, ledger cards, bills of lading and other shipping evidence, statements,
correspondence,
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memoranda, credit files and other data relating to the Collateral or any account
debtor, together with the tapes, disks, diskettes and other data and software
storage media and devices, file cabinets or containers in or on which the
foregoing are stored (including any rights of the Borrower with respect to the
foregoing maintained with or by any other person); and
(g) all products and proceeds of the foregoing, in any form, including,
without limitation, insurance proceeds and any claims against third parties for
loss or damage to or destruction of any or all of the foregoing.
D-3
SCHEDULE E
DISCLOSURE SCHEDULE
E-1
INITIAL BORROWING NOTICE
Reference is made to the Subordinated Loan and Security Agreement dated
as of November 21, 2001 (as amended from time to time, the "Agreement") among
Rouge Steel Company (the "Borrower"), the Guarantors referred to therein and
Ford Motor Company, as Lender. Terms defined in the Agreement are used herein as
defined therein.
Pursuant to Section 4 of the Agreement, the undersigned hereby requests
the Initial Loan in the amount of $10,000,000 to be made on November 21, 2001.
After giving effect to such Initial Loan, the aggregate principal amount of the
Loans outstanding will be $10,000,000. The proceeds of such Initial Loan should
be made available to the Borrower by wire transfer to the following bank
account: .
The undersigned, the of the Borrower, hereby certifies, both on
and as of the date hereof (and giving effect to the Initial Loan) that:
1. No Default has occurred and is continuing;
2. The representations and warranties of the Borrower set forth in the
Agreement are true and correct, in all material respects; and
3. A Plan of Cash Disbursements setting forth the projected cash
disbursements to be made from the proceeds of the Loan requested hereby has been
delivered to Xxxxx Xxxxxx Xxxx, Inc. in a format reasonably satisfactory to
them.
IN WITNESS WHEREOF, the undersigned has caused this Borrowing Notice to
be duly executed as of the 21st day of November, 2001.
_________________________
Name:
Title:
THE INDEBTEDNESS EVIDENCED BY THIS NOTE IS SUBORDINATE IN ACCORDANCE WITH THE
TERMS AND CONDITIONS OF THE INTERCREDITOR AGREEMENT DATED AS OF NOVEMBER 21,
2001 BETWEEN THE LENDER AND CONGRESS FINANCIAL CORPORATION TO INDEBTEDNESS
INCURRED BY THE MAKER PURSUANT TO THE LOAN AND SECURITY AGREEMENT BY AND AMONG
ROUGE STEEL COMPANY (AS BORROWER) AND ROUGE INDUSTRIES, INC., QS STEEL, INC.,
AND EVELETH TACONITE COMPANY (AS GUARANTORS) AND CONGRESS FINANCIAL CORPORATION
(AS AGENT) AND THE FINANCIAL INSTITUTIONS NAMED THEREIN, DATED AS OF MARCH 13,
2001.
NOTE
$75,000,000
November 21, 2001
FOR VALUE RECEIVED, ROUGE STEEL COMPANY, a Delaware corporation (the
"Borrower"), hereby promises to pay to the order of FORD MOTOR COMPANY (the
"LENDER") on March 29, 2002, at the Lender's office indicated in the Agreement
referred to below, or at such other place as the holder hereof may hereafter
designate in writing, in lawful money of the United States of America, the
principal sum of SEVENTY-FIVE MILLION DOLLARS or, if less than such principal
sum, the aggregate unpaid principal amount of all Loans made by the Lender to
the Borrower pursuant to the Agreement and outstanding hereunder from time to
time, at the rate per annum provided for in Section 5 of the Agreement. This
Note is the note referred to in the Subordinated Loan and Security Agreement
dated as of the date hereof among the Borrower, the Guarantors named therein and
the Lender (as amended, modified and supplemented from time to time, the
"AGREEMENT").
In case an Event of Default (as defined in the Agreement) shall have
occurred and be continuing, the principal of and accrued interest on this Note
may be declared to be due and payable in the manner and with the effect provided
in the Agreement. The Borrower hereby waives presentment, demand, protest or
notice of any kind in connection with this Note.
This Note and the rights and obligations of the Borrower and the payee
hereunder shall be governed by and construed in accordance with the laws of the
State of New York.
ROUGE STEEL COMPANY
By: ________________________
Name:
Title:
PAYMENT SCHEDULE
Amount of Balance
Amount Borrowing Interest Principal Remaining Notation
Date of Loan Period Rate Paid Unpaid Made By
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