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Exhibit 4(e)
FIRST AMENDMENT AGREEMENT
TO
Re: Note Agreements Dated as of December 15, 1995
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TABLE OF CONTENTS
SECTION HEADING PAGE
SECTION 1. OMNIBUS AMENDMENT...........................................................................1
SECTION 2. ADDITIONAL AMENDMENTS TO EXISTING NOTE AGREEMENTS...........................................2
Section 2.1. Amendment to Section 2.1...........................................................2
Section 2.2. Amendment to Section 2.2...........................................................2
Section 2.3. Amendment to Section 2.3...........................................................2
Section 2.4. Additional Amendment to Section 2.3................................................4
Section 2.5. Amendment to Section 2.4..........................................................4
Section 2.6. Amendment to Section 2.5...........................................................4
Section 2.7. Amendment to Section 2.8...........................................................4
Section 2.8. Amendment to Section 5.6...........................................................5
Section 2.9. Amendment to Section 5.7...........................................................5
Section 2.10. Amendment to Section 5.8...........................................................6
Section 2.11. Amendment to Section 5.9...........................................................7
Section 2.12. Amendment to Section 5.10..........................................................7
Section 2.13. Amendment to Section 5.11..........................................................9
Section 2.14. Amendment to Section 5.15..........................................................9
Section 2.15. New Sections 5.16 through 5.21....................................................10
Section 2.16. Amendment to Section 6.1..........................................................12
Section 2.17. Additional Amendment to Section 6.1...............................................12
Section 2.18. Amendment to Section 8.1.........................................................13
Section 2.19. Additional Amendment to Section 8.1...............................................14
Section 2.20. Additions to Section 8.1..........................................................15
Section 2.21. Exhibit and Schedules.............................................................20
SECTION 3. CONDITIONS PRECEDENT.......................................................................20
SECTION 4. REPRESENTATIONS AND WARRANTIES.............................................................22
SECTION 5. MISCELLANEOUS..............................................................................23
Signatures ......................................................................................................24
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SCHEDULE I -- Name of Holders and Principal Amount of Notes
EXHIBIT A -- Form of Note
EXHIBIT B -- Form of Subsidiary Guaranty
EXHIBIT C -- Opinion of Counsel for the Company
EXHIBIT 5.7 -- Debt of the Company and its Subsidiaries outstanding
on December 15, 2002
EXHIBIT 5.8 -- Basket Obligations outstanding on December 15, 2002
EXHIBIT 5.9 -- Liens
EXHIBIT 5.19 -- Restricted Investments
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Dated as of
December 15, 2002
To each of the holders
listed in Schedule I to
this First Amendment Agreement
Ladies and Gentlemen:
Reference is made to (i) the separate Note Agreements each dated as of
December 15, 1995 (the "Existing Note Agreements" and, as amended hereby, the
"Note Agreements"), among Cleveland-Cliffs Inc, an Ohio corporation (the
"Company") and the Purchasers named on Schedule I attached thereto, respectively
and (ii) the $70,000,000 aggregate principal amount of 7.00% Senior Notes due
December 15, 2005 of the Company (the "Existing Notes" and, as amended hereby,
the "Notes").
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Company requests the amendment of certain
provisions of the Existing Note Agreements and the Existing Notes as hereinafter
provided.
Upon your acceptance hereof in the manner hereinafter provided and upon
satisfaction of all conditions to the effectiveness hereof and receipt by the
Company of similar acceptances from the holders of all of the Existing Notes,
this First Amendment Agreement shall constitute a contract between us amending
the Existing Note Agreements and the Existing Notes, in each case, as of
December 15, 2002, but only in the respects hereinafter set forth:
SECTION 1. OMNIBUS AMENDMENT.
All references in any and all of the Existing Note Agreements and the
Existing Notes to an interest rate applicable to the Notes of "7.00%" per annum
(or "9.00%" per annum in the case of overdue payments) shall hereafter read (i)
"9.50%" (or "11.50%" in the case of overdue payments) for the period from
December 15, 2003 through December 14, 2004, and (ii) "10.50%" (or "12.50%" in
the case of overdue payments) for the period from and after December 15, 2004,
each in any and all instances where such interest rates appear. All written
references to the interest rates in effect prior to this First Amendment
Agreement shall be and are hereby amended to incorporate the above-described new
interest rates in respect of the Notes and with respect to any overdue payments
in respect of the Notes. Upon the request of any holder of a Note, the Company
shall replace such holder's Note with a new Note substantially in the form of
Exhibit A attached hereto. In addition, all references in any and all of the
Existing Note Agreements to "1995 GAAP" shall be and are hereby amended to read:
"GAAP" for all purposes under the Financing Agreements in respect of any and all
fiscal periods ending on and after December 31, 2002 and that any requirement
contained in Section 5.15(g) for a GAAP Reconciliation for or with respect to
any such fiscal period shall be deleted.
Cleveland-Cliffs, Inc. First Amendment Agreement
SECTION 2. ADDITIONAL AMENDMENTS TO EXISTING NOTE AGREEMENTS.
Section 2.1. Amendment to Section 2.1. Section 2.1 of the Existing Note
Agreements shall be and is hereby amended in its entirety to read as follows:
"Section 2.1. Required Prepayments. On December 15, 2003 and
on December 15, 2004, the Company will prepay $20,000,000 principal
amount (or such lesser principal amount as shall then be outstanding)
of the Notes at par and without payment of the Make-Whole Amount or any
premium."
Section 2.2. Amendment to Section 2.2. Section 2.2 of the Existing Note
Agreements shall be and is hereby amended in its entirety to read as follows:
"Section 2.2. Optional Prepayment with Premium. Upon compliance with
ss.2.4, the Company shall have the right, at any time and from time to
time, of prepaying the outstanding Notes, either in whole or in part
(but if in part then in a minimum principal amount of $1,000,000) by
payment of the principal amount of the Notes, or portion thereof to be
prepaid, and accrued interest thereon to the date of such prepayment,
at par and without Make-Whole Amount."
Section 2.3. Amendment to Section 2.3. Sections 2.3(a), (b) and (c) of
the Existing Agreements shall be and are hereby amended to read as follows:
"(a) In the event that the Company shall have advance
notice of a Change of Control Event which the Company
determines in good faith is likely to occur no less than 60
days or more than 120 days from the date of such notice, then
it shall provide written notice (a "ss.2.3(a) Notice") to all
holders of the Notes of such proposed Change of Control Event,
which ss.2.3(a) Notice shall include the information specified
in ss.2.3(C) and shall contain the agreement of the Company to
prepay all the Notes held by such holders accepting the
prepayment offer concurrently with the closing of the
transaction which causes or constitutes a Change of Control
Event (the "Prepayment Offer"). The holder of any Notes that
wishes to accept such Prepayment Offer shall notify the
Company in writing of the acceptance of the Prepayment Offer
upon the Change of Control Event within 45 days of receipt of
the ss.2.3(a) Notice. On the date 30 days prior to the date of
the closing of the proposed transaction, the Company shall
provide to each holder of Notes which has not yet responded to
the ss.2.3(a) Notice, a duplicate copy of the ss.2.3(a) Notice
originally sent to such holder. Not less than five days prior
to the date of the closing of the proposed transaction, the
Company will furnish to each holder of Notes a written
confirmation of the date of the Change of Control Event. On
the date the Change of Control Event occurs the Company shall
in accordance with the ss.2.3(a) Notice prepay
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Cleveland-Cliffs, Inc. First Amendment Agreement
the principal amount of the Notes held by the holders that
have delivered such notice of acceptance of the Prepayment
Offer, together with accrued interest thereon to the date of
such prepayment. Such obligation to prepay the Notes with
respect to a particular proposed Change of Control Event
described in a ss.2.3(a) Notice shall terminate in the event
that such Change of Control Event does not occur within 120
days of the date of the ss.2.3(a) Notice relating to such
proposed Change of Control Event upon substantially the terms
described in such ss.2.3(a) Notice. If either (i) the Company
shall have at least 45 days advance notice that, in the case
of any Change of Control Event approved of or authorized by
the Company notwithstanding the best efforts of the Company to
complete the proposed Change of Control Event within the
120-day period after the initial ss.2.3(a) Notice with respect
thereto, the proposed Change of Control Event will occur more
than 120 days after the initial ss.2.3(a) Notice with respect
to such proposed Change of Control Event or (ii) the terms
applicable to the proposed Change of Control Event previously
described in the initial ss.2.3(a) Notice with respect thereto
are materially different from the terms initially described,
the Company shall give additional ss.2.3(a) Notices and the
holders of the Notes shall have the right of prepayment as
contemplated herein.
(b) In the event (i) the Company shall not have
sufficient advance notice of a Change of Control Event to
timely furnish a ss.2.3(a) Notice, and (ii) a Change of
Control Event shall occur, the Company will, as soon as
reasonably practicable and in any event within five (5) days
after such Change of Control Event, give notice of such event
to all holders of the Notes (a "ss.2.3(b) Notice") which shall
include the information specified in ss.2.3(C) and shall
contain the agreement of the Company to prepay all Notes held
by such holders accepting the prepayment offer. The holder of
any Notes may notify the Company in writing of the acceptance
of the offer of prepayment at least five days prior to the
date specified for prepayment in the ss.2.3(b) Notice. On the
date 30 days prior to the prepayment date, the Company shall
provide to each holder of Notes which has not yet responded to
the ss.2.3(a) Notice, a duplicate copy of the ss.2.3(a) Notice
originally sent to such holder. On the date designated in the
ss.2.3(b) Notice, the Company shall prepay the principal
amount of all Notes held by all holders that have delivered
such notice of acceptance of the prepayment offer, together
with accrued interest thereon to the date of such prepayment.
(c) The ss.2.3(a) Notice and ss.2.3(b) Notice
required to be given by the Company pursuant to and in
accordance with the
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Cleveland-Cliffs, Inc. First Amendment Agreement
provisions of ss.ss.2.3(A) and (B), respectively, shall, in
each case, be in writing and shall set forth, (i) a summary of
the transaction or transactions causing or proposed to cause
the Change of Control Event, (ii) such financial or other
information as the Company in good faith determines is
appropriate for each holder to make an informed decision as to
whether to require a prepayment of such holder's Notes, (iii)
in the case of any ss.2.3(b) Notice, the date set for
prepayment, if any, of the Notes which date shall not be less
than 45 days or more than 60 days after the date of such
notice, (iv) that the Notes will be prepayable at a price
equal to the principal amount thereof together with accrued
interest to the date of prepayment, without a Make-Whole
Amount and (v) the amount of accrued interest applicable to
the prepayment. Thereafter and prior to the Change of Control
Event the Company shall provide such other information as each
holder of the Notes shall reasonably determine is necessary
for such holder to make an informed decision as to whether to
require a prepayment of such holder's Notes."
Section 2.4. Additional Amendment to Section 2.3. Section 2.3 of the
Existing Note Agreements shall be and is hereby amended by inserting a period
immediately prior to the word "if" in the penultimate paragraph of said Section
2.3 and by deleting the language in such paragraph beginning with such word
"if".
Section 2.5. Amendment to Section 2.4. Section 2.4 of the Existing Note
Agreements shall be and is hereby amended by changing the present references to
"30 days" and "60 days", respectively, presently contained therein to "10
Business Days" and "20 Business Days", respectively.
Section 2.6. Amendment to Section 2.5. Section 2.5 of the Existing Note
Agreements shall be and is hereby amended in its entirety to read as follow:
"Section 2.5. Application of Prepayments. All partial prepayments
pursuant to ss.2.1 and ss.2.2 shall be applied on all outstanding Notes
ratably in accordance with the unpaid principal amounts thereof. All
partial prepayments pursuant to ss.2.8, if any, shall be applied on
those Notes being prepaid ratably in accordance with the unpaid
principal amounts thereof."
Section 2.7. Amendment to Section 2.8. The following shall be added as
a new Section 2.8 of the Existing Note Agreements:
"Section 2.8. Noteholder Excess Cash Flow Prepayment. On or before
March 1, 2004 and March 1, 2005, the Company will give each holder of
Notes a written offer to prepay on the March 30 next following the date
of such offer, a principal amount of Notes equal to such holder's
Noteholder Excess Cash Flow for the immediately preceding fiscal year
together with accrued and unpaid interest on such principal amount.
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Cleveland-Cliffs, Inc. First Amendment Agreement
Each such offer shall specify the principal amount of the Notes offered
to be prepaid in the aggregate, the principal amount of each Note
offered to be prepaid, and the interest to be paid on such prepayment
date with respect to such principal amount then being prepaid. Each
such offer shall also include a reasonably detailed calculation of the
Excess Cash Flow giving rise to such offer of prepayment pursuant to
this ss.2.8. In the event that Excess Cash Flow for the period of
calculation is zero or otherwise not a positive figure, the Company,
nonetheless, shall provide to each holder of Notes a written notice
describing in reasonable detail its calculation of Excess Cash Flow
prior to March 1, 2004 and March 1, 2005, if applicable, it being
acknowledged and agreed that in any such event, no offer of prepayment
of the Notes is required pursuant to this Section 2.8 with respect to
such fiscal year. In the event any holder of Notes wishes to accept
such offer of prepayment, it shall send written notice of acceptance to
the Company on or before the March 15 next following the receipt of the
Company offer. In the event one or more holders of Notes fail to accept
such offer, the Company shall offer, by written notice on or before the
following March 20 to each holder, if any, who has timely accepted the
Company's initial offer of prepayment in respect of its Notes, to
prepay, on a pro rata basis (based on the respective unpaid principal
amount of Notes of such holders) among all holders who accepted the
initial offer, an aggregate principal amount of Notes equal to the
aggregate Noteholder Excess Cash Flow offered to holders who failed to
timely accept the initial offer of prepayment. The holders receiving
such second offer, if any, shall have the right to accept such offer by
written notice to the Company on or before the March 25 next following
the receipt of such second offer. The Company will prepay the aggregate
principal amount of Notes on March 30, 2004 and March 30, 2005 required
to be prepaid pursuant to this ss.2.8 of all holders who have timely
accepted the offers required to be made by the Company hereinabove
together with accrued and unpaid interest to the date of prepayment.
As used hereinabove, "Noteholder Excess Cash Flow" for each
holder of Notes shall be equal to Excess Cash Flow multiplied by a
fraction the numerator of which is equal to the unpaid principal amount
of such holder's Notes on the Business Day immediately preceding any
such prepayment pursuant to this ss.2.8 (the "ss.2.8 Payment Date") and
the denominator of which is equal to the sum of the then aggregate
unpaid principal amount of all Notes plus the aggregate unpaid
principal amount outstanding under the Bank Facility as of the ss.2.8
Payment Date."
Section 2.8. Amendment to Section 5.6. Section 5.6 of the Existing Note
Agreements shall be and is hereby amended in its entirety to read as follows:
"Section 5.6. Intentionally Deleted."
Section 2.9. Amendment to Section 5.7. Section 5.7 of the Existing Note
Agreements shall be and is hereby amended in its entirety to read as follows:
"Section 5.7. Limitations on Debt. (a) The Company will not,
and will not permit any Subsidiary to, create, assume or incur or in
any manner be or become liable in
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Xxxxxxxxx-Xxxxxx, Inc. First Amendment Agreement
respect of any Debt (other than Debt of a Subsidiary to the Company or
to a Wholly-Owned Subsidiary Guarantor), except:
(1) Debt evidenced by the Notes;
(2) Debt of the Company and its Subsidiaries
outstanding as of December 15, 2002 and described on Exhibit
5.7 hereto; and additional Debt incurred for the purpose of
extending, renewing or refunding such Debt, provided that the
principal amount of any such item of additional Debt shall not
exceed the then outstanding principal amount of the Debt which
is the subject of such extension, renewal or refunding;
(3) additional Debt of the Company and its
Subsidiaries pursuant to the Bank Facility;
(4) customer advances for prepayment of ore sales;
and
(5) additional Debt of the Company and its
Subsidiaries consisting of Capitalized Rentals in respect of
mining interests of the Company and its Subsidiaries
(including Capitalized Rentals incurred in connection with the
making of Investments), provided, that the Company will not at
any time permit all Capitalized Rentals of the Company and its
Subsidiaries (including Capitalized Rentals in respect of
Capitalized Leases outstanding as of December 15, 2002 which
remain in effect) to exceed an amount equal to $15,000,000.
(b) Any Person which becomes a Subsidiary after the date
hereof shall for all purposes of this ss.5.7 be deemed to have created,
assumed or incurred at the time it becomes a Subsidiary all Debt
(including Debt consisting of Capitalized Rentals) of such Person
existing immediately after it becomes a Subsidiary and, in any such
event, compliance with ss.5.7 shall be determined on a consolidated
basis after giving effect to such Person becoming a Subsidiary."
Section 2.10. Amendment to Section 5.8. Section 5.8 of the Existing
Note Agreements shall be and is hereby amended in its entirety so that the same
shall henceforth read as follows:
"Section 5.8. Limitation on Basket Obligations. The Company
will not at any time permit to exist any Basket Obligations other than:
(1) Basket Obligations outstanding as of December
15, 2002 and described on Exhibit 5.8 hereto and any
additional Basket Obligations incurred for the purpose of
extending, renewing or refunding any such Basket Obligation,
provided that the principal amount of any such additional
Basket Obligations shall not exceed the then outstanding
amount of the Basket Obligation which is the subject of such
extension, renewal or refunding and any Lien securing any
Basket Obligation which may be extended or renewed shall not
encumber any property which it did not previously encumber
prior to such extension or renewal;
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Cleveland-Cliffs, Inc. First Amendment Agreement
(2) Basket Obligations consisting of Capitalized
Rentals to the extent permitted by ss.5.7(a)(5)."
Section 2.11. Amendment to Section 5.9. Section 5.9 of each of the
Existing Note Agreements shall be and is hereby amended by deleting the last
paragraph thereof and by adding the following provision at the end thereof:
"As an additional restriction with respect to the right of the
Company or any Subsidiary to incur or have outstanding any Debt
secured, directly or indirectly, by any Lien, the Company will not and
will not permit any Subsidiary to incur any or have outstanding Debt
which is, directly or indirectly, secured by any Lien other than:
(a) Capitalized Rentals to the extent permitted
by ss.ss.5.7 and 5.8; and
(b) Debt described on Exhibit 5.7 secured by Liens
described on Exhibit 5.9 hereto together with any extension or
renewal of any such Lien provided, that
(i) the principal amount of the Debt
secured by any such Liens does not increase from the
amount outstanding as of the time of such extension
or renewal and
(ii) such extended or renewed Lien does not
extend to any other property which was not encumbered
by such Lien immediately preceding such extension or
renewal."
Section 2.12. Amendment to Section 5.10. Section 5.10 of the Existing
Note Agreements shall be and is hereby amended in its entirety to read as
follows:
"Section 5.10. Mergers, Consolidations and Sales of Assets.
(a) The Company will not, and will not permit any Subsidiary to, (i)
consolidate with or be a party to a merger with any other Person or
(ii) sell, lease or otherwise dispose of all or substantially all of
the assets of the Company and its Subsidiaries; provided, however,
that:
(1) any Subsidiary may merge or consolidate with or into, or
sell, lease or otherwise dispose of all or substantially all of its
assets to, (i) the Company or any other Subsidiary so long as in any
merger or consolidation involving the Company, the Company shall be the
surviving or continuing corporation, or (ii) any other Person so long
as (x) at the time of such merger or consolidation and after giving
effect thereto, each of the conditions described in
ss.ss.5.10(a)(2)(ii) and (iii) are satisfied and (y) the surviving
Person shall be a Subsidiary Guarantor; or
(2) the Company may consolidate or merge with or into, or
sell, lease or otherwise dispose of all or substantially all of its
assets to, any other corporation if:
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Xxxxxxxxx-Xxxxxx, Inc. First Amendment Agreement
(i) the purchasing, surviving or continuing
corporation (the "Surviving Corporation") shall be either the
Company or a corporation organized under the laws of the
United States or any jurisdiction thereof, and in the case of
any such consolidation or merger or sale in which the Company
is not the Surviving Corporation, the Surviving Corporation
shall (x) expressly assume in writing the due and punctual
payment of the principal of, Make-Whole Amount, if any, and
the interest on all of the Notes outstanding according to
their tenor and the due and punctual performance and
observance of all of the covenants in the Financing Agreements
to be performed or observed by the Company, and (y) furnish to
the holders of the Notes an opinion of independent counsel to
the effect that the instrument of assumption has been duly
authorized, executed and delivered and constitutes the legal,
valid and binding contract and agreement of the Surviving
Corporation enforceable in accordance with its terms, subject
to terms and qualifications reasonably satisfactory to holders
of not less than 66 2/3% in aggregate principal amount of the
then outstanding Notes;
(ii) at the time of such consolidation, merger or
sale and after giving effect thereto, no Default or Event of
Default shall have occurred and be continuing; and
(iii) such consolidation, merger or sale does not
result in a Material Adverse Effect.
(b) The Company will not and will not permit any Subsidiary to sell,
lease or otherwise dispose of (other than in the ordinary course of business)
any substantial part (as defined in ss.5.10(c) below) of the assets of the
Company and its Subsidiaries, taken as a whole, provided that any Subsidiary may
sell, lease or otherwise dispose of a substantial part of its assets to the
Company or a Subsidiary Guarantor. For the purposes of any determination under
this ss.5.10, a sale or other disposition of assets of the Company and its
Subsidiaries shall include, but not be limited to, the creation of any Minority
Interests and any other sale, transfer or other disposition of the capital stock
or assets of any Subsidiary (other than to the Company or another Subsidiary
Guarantor), including any merger, consolidation or sale of all or substantially
all of the assets of any Subsidiary if the surviving corporation or the
transferee corporation of such assets is not the Company or a Subsidiary
Guarantor.
(c) As used in this ss.5.10, and subject to the provisions of the
following paragraph, a sale, lease or other disposition of assets shall be
deemed to be a "substantial part" of the assets of the Company and its
Subsidiaries, taken as a whole, if the proceeds of the sale, lease or other
disposition of such assets, when added to the proceeds of the sale, lease or
other disposition of all other assets sold, leased or otherwise disposed of by
the Company and its Subsidiaries (other than in a transaction permitted by
ss.5.10(a) or in the ordinary course of business) during the twelve-month period
ending with the date on which such sale, lease or other disposition was
consummated exceeds $6,000,000 (excluding sale proceeds derived prior to
December 15, 2002) in the case of any such transaction occurring on or after
December 15, 2002 and on or before December 14, 2003 and, in the case of any
such transaction occurring on or after December 15, 2003, $5,000,000.
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Cleveland-Cliffs, Inc. First Amendment Agreement
For the purpose of making any determination of "substantial part," any
sale, lease or other dispositions of assets of the Company and its Subsidiaries
shall not be included if the net proceeds are segregated from the general
accounts of the Company or any Subsidiary and within six months in the case of
clause (1) below and twelve months in the case of clause (2) below, after such
sale, lease or other disposition such net proceeds are (1) applied to capital
expenditures in respect of maintenance and not in respect of expansion, or (2)
except to the extent that the net proceeds are required to be applied to the
payment of any Debt secured by a Lien on such assets, offered by the Company
pursuant to a written offer to each of the holders of Notes to apply such net
proceeds to the prepayment of the unpaid principal amount of the Notes, at par
and without Make-Whole Amount together with accrued and unpaid interest to the
date of payment, which date of payment shall not be more than 45 or less than 30
days after the date of such written offer. Each such offer shall be made to all
holders of Notes on a pro rata basis based on the unpaid principal amount of
each holders' respective Notes and shall specify the principal amount of the
Notes offered to be prepaid in the aggregate, the principal amount of each Note
offered to be prepaid and the interest to be paid on the prepayment date with
respect to such principal amount then being offered to be prepaid. In the event
that any holder of Notes wishes to accept such offer of prepayment, it shall
send written notice of such acceptance to the Company within 15 days following
receipt of the initial Company offer. In the event one or more holders of Notes
fail to accept such offer, the Company shall offer, within 5 days after the end
of the aforementioned 15 day period, to each holder, if any, who has timely
accepted the Company's initial offer of prepayment in respect of its Notes
pursuant to this ss.5.10, to prepay, on a pro rata basis (based on the respect
of unpaid principal amount of Notes of such holders who have timelY accepted the
initial offer) among all holders who accepted the initial offer, an aggregate
principal amount of Notes equal to the aggregate principal amount of Notes
offered to holders who failed to timely accept the initial offer of prepayment
pursuant to ss.5.10. The holders receiving such second offer, if any, shall have
the right to accept such offer by written notice to the CompanY within 5 days
after receipt of such second offer by the Company. The Company will prepay the
aggregate principal amount of Notes required to be paid pursuant to the
foregoing provisions of this ss.5.10 on the date originally designated in the
first offer oF prepayment to all holders who have timely accepted the offers
required to be made by the Company hereinafter together with accrued and unpaid
interest to the date of prepayment.
Section 2.13. Amendment to Section 5.11. Section 5.11(ii) of the
Existing Note Agreements shall be and is hereby amended as follows:
"(ii) the Subsidiary Guaranty and the Bank Facility Guaranty."
Section 2.14. Amendment to Section 5.15. The last sentence of the
paragraph immediately after Section 5.15(i) shall be and is hereby amended in
its entirety to read as follows:
"The Company shall promptly upon demand pay or reimburse any
such holder for all reasonable expenses which such holder may
incur in connection with such visitation or inspection."
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Xxxxxxxxx-Xxxxxx, Inc. First Amendment Agreement
Section 2.15. New Sections 5.16 through 5.21. The following shall be
added at the end of Section 5 of the Existing Note Agreements:
"Section 5.16. Minimum Consolidated EBITDA. The Company will
not permit, as of the end of each fiscal quarter described below,
Consolidated EBITDA for the respective period described below to be
less than the respective amounts set forth opposite such fiscal quarter
end in the following table:
FISCAL QUARTER END MINIMUM CONSOLIDATED EBITDA
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the four fiscal quarter period ending December 31, $7,000,000
2002
the fiscal quarter ending March 31, 2003 $0
the two fiscal quarter period ending June 30, 2003 $15,000,000
the three fiscal quarter period ending $28,000,000
September 30, 2003
the four fiscal quarter period ending December 31, $40,000,000
2003 and for each fiscal quarter thereafter
calculated for each period of four consecutive
fiscal quarters (ending on the date of
determination and taken as a single accounting
period).
"Section 5.17 Consolidated EBITDAR. The Company will not
permit, as of the end of each fiscal quarter described below, the ratio
of Consolidated EBITDAR to Fixed Charges for the respective period
described below to be less than the respective amounts set forth
opposite such fiscal quarter end in the following table:
FISCAL QUARTER END MINIMUM RATIO
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the four fiscal quarter period ending December 31, 2002 .98 to 1.00
the fiscal quarter ending March 31, 2003 .90 to 1.00
the two fiscal quarter period ending June 30, 2003 1.48 to 1.00
the three fiscal quarter period ending September 30, 2003 1.68 to 1.00
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Cleveland-Cliffs, Inc. First Amendment Agreement
the four fiscal quarter period ending December 31, 2003 1.80 to 1.00
the four fiscal quarter period ending March 31, 2004 1.82 to 1.00
the four fiscal quarter period ending June 30, 2004 1.88 to 1.00
the four fiscal quarter period ending September 30, 2004 1.95 to 1.00
the four fiscal quarter period ending December 31, 2004 and 2.06 to 1.00
for each fiscal quarter thereafter, for each fiscal period of
four consecutive fiscal quarters
"Section 5.18. Restricted Payments Prohibited. The Company
will not and will not permit any of its Subsidiaries to, declare or
make, or incur any liability to declare or make, any Restricted
Payments.
"Section 5.19. Restricted Investments Prohibited. The Company
will not and will not permit any of its Subsidiaries to have, make or
authorize any Restricted Investments.
"Section 5.20. Additional Restrictions. In addition to and not
in limitation of any of the restrictions to which the Company or any
Subsidiary is subject pursuant to this Agreement, the Company agrees
that in the event the Company or any Subsidiary is subject to any
covenant or agreement for the benefit of any lender or other provider
of credit which is in addition to, or more restrictive than the
covenants and agreements to which the Company and its subsidiaries are
subject pursuant to this Agreement, such other covenants or agreements,
without further action, shall be deemed to be incorporated herein and
the holders of the Notes shall be entitled to the benefit of such
covenants and agreements at all times so long as such other covenants
and agreements remain outstanding. At the request of the holders of not
less than 66-2/3% in aggregate principal amount of the Notes then
outstanding, the Company shall, or shall cause the appropriate
Subsidiary to enter into amendments hereto or to any other Financing
Agreement to properly incorporate the aforementioned additional
covenants or other agreements.
"Section 5.21. Additional Guarantors and Opinions. (a) In the
event that any Person organized under the laws of the United States or
any State thereof becomes a Subsidiary which is either a Wholly-Owned
Subsidiary or not subject to a legal or contractual prohibition with
respect to its right to execute a Guaranty (which prohibition was not
incurred in contemplation of such Person becoming a Subsidiary) after
December 15, 2002 (a "New Subsidiary"), such New Subsidiary shall
execute and deliver a Guaranty substantially identical to the
Subsidiary Guaranty attached hereto as
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Cleveland-Cliffs, Inc. First Amendment Agreement
Exhibit B (the "Subsidiary Guaranty") or shall become a party to the
Existing Subsidiary Guaranty pursuant to the Subsidiary Guaranty
Supplement attached to the Subsidiary Guaranty as Exhibit A,
concurrently with such Person initially becoming a New Subsidiary. The
Company agrees to use commercially reasonable efforts to have any such
prohibition waived to the extent necessary to permit such Subsidiary to
execute and deliver the Subsidiary Guaranty (which shall include an
offer to defray reasonable legal or administrative fees but shall not
include other material consideration or concessions).
(b) On or before January 25, 2002, the Company shall have
delivered to the holders of the Notes legal opinions of independent
counsel substantially identical in scope and substance to the opinions
set forth in Exhibit C-1, but with appropriate adjustments to cover
Subsidiaries organized under the laws of Michigan and Minnesota.
Section 2.16. Amendment to Section 6.1. Sections 6.1(c), (d) and (e) of
the Existing Note Agreements shall be and are hereby amended in their entirety
as follows:
"(c) Default shall be made in the payment when due (whether by
lapse of time, by declaration, by call for redemption or otherwise) of
any principal of or interest on any Debt (other than the Notes) in
excess of $100,000 in the aggregate and such default shall continue
beyond the period of grace, if any, allowed with respect thereto; or
(d) Default shall occur in the observance or performance of
any terms or provisions in respect of any Debt of the Company or any
Subsidiary (other than the Notes) in excess of $100,000 in the
aggregate and such default shall continue beyond the period of grace,
if any, allowed with respect thereto; or
(e) (1) Default shall occur in the performance or observance
of (i) any of the provisions of ss.ss.5.6 through 5.12, and ss.ss.5.16
through 5.21, inclusive, or (ii) any other provision of any of the
Financing Agreements which other provision is not remedied within 30
days after the earlier of (A) the day on which an Executive Officer
first obtains actual knowledge of such default or (B) the day on which
written notice thereof is given to the Company by the holder of any
Notes, or (2) any Subsidiary Guaranty ceases to be enforceable or
effective or in full force and effect for any reason or the Company or
any Subsidiary Guarantor alleges that a Subsidiary Guaranty is
unenforceable or ceases in any manner to be effective or in full force
or effect; or"
Section 2.17. Additional Amendment to Section 6.1. The following shall
be added at the end of Section 6.1 of the Existing Note Agreement:
"Notwithstanding anything contained in ss.5.4 of this
Agreement or in this ss.6.1 to the contrary, the voluntary or
involuntary liquidation, receivership or other disposition of Cliffs
and Associates Limited, a Subsidiary organized under the laws of
Trinidad and Tobago and its Wholly-Owned Subsidiary, Calipso Sales
Company, a Delaware corporation (collectively, "CAL") shall not
constitute an Event of Default hereunder provided, that (i) after
giving effect to any such transaction the Company and its Subsidiaries
directly or indirectly own no more than 20% of any equity interests in
CAL,
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Cleveland-Cliffs, Inc. First Amendment Agreement
(ii) from and after December 15, 2002, CAL (x) does not enter into any
merger, consolidation or other similar transaction except in connection
with any such liquidation, receivership or other disposition, and (y)
does not acquire, directly or indirectly, any additional material
assets or operations and, (iii) any such liquidation and/or
receivership or other disposition could not result in any material
obligations or liabilities being imposed upon the Company or any
Subsidiary (other than reasonable and customary filing, legal and other
similar administrative fees and expenses) which would not have existed
in the absence of any such liquidation and/or receivership."
Section 2.18. Amendment to Section 8.1. The term "Consolidated Total
Assets" shall be deleted from Section 8.1 and the term "Make-Whole Amount"
contained in Section 8.1 shall be and is hereby amended in its entirety so that
the same shall henceforth read as follows:
"Make-Whole Amount" means, with respect to any Note, an amount
equal to the excess, if any, of the Discounted Value of the Remaining
Scheduled Payments with respect to the Called Principal of such Note
over the amount of such Called Principal, provided that the Make-Whole
Amount may in no event be less than zero. For the purposes of
determining the Make-Whole Amount, the following terms have the
following meanings:
"Called Principal" means, with respect to any Note, the
principal of such Note that is to be prepaid pursuant to
ss.2.3 or has become or is declared to be immediately due and
payable pursuant to ss.6.3, as the context requires.
"Discounted Value" means, with respect to the Called Principal
of any Note, the amount obtained by discounting all Remaining
Scheduled Payments with respect to such Called Principal from
their respective scheduled due dates to the Settlement Date
with respect to such Called Principal, in accordance with
accepted financial practice and at a discount factor (applied
on the same periodic basis as that on which interest on the
Notes is payable) equal to the Reinvestment Yield with respect
to such Called Principal.
"Reinvestment Yield" means, with respect to the Called
Principal of any Note, 0.60% over the yield to maturity
implied by (i) the yields reported, as of 10:00 A.M. (New York
City time) on the second Business Day preceding the Settlement
Date with respect to such Called Principal, on the display
designated as "Screen PX1" on the Bloomberg Financial Markets
Screen, or, if not available, any other nationally recognized
trading screen reporting on-line intraday trading in the U.S.
Treasury securities (or such other display as may replace
Screen PX1 on the Bloomberg Financial Markets Screen, or, if
not available, any other nationally recognized trading screen
reporting on-line intraday trading in the U.S. Treasury
securities) for actively traded U.S. Treasury securities
having a maturity equal to the Remaining Average Life of such
Called Principal as of such Settlement Date, or (ii) if such
yields are not reported as of such time or the yields reported
as of such time are not ascertainable, the Treasury Constant
Maturity Series Yields reported, for the latest day for which
such yields have been so
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Cleveland-Cliffs, Inc. First Amendment Agreement
reported as of the second Business Day preceding the
Settlement Date with respect to such Called Principal, in
Federal Reserve Statistical Release H.15 (519) (or any
comparable successor publication) for actively traded U.S.
Treasury securities having a constant maturity equal to the
Remaining Average Life of such Called Principal as of such
Settlement Date. Such implied yield will be determined, if
necessary, by (a) converting U.S. Treasury xxxx quotations to
bond-equivalent yields in accordance with accepted financial
practice and (b) interpolating linearly between (1) the
actively traded U.S. Treasury security with the maturity
closest to and greater than the Remaining Average Life and (2)
the actively traded U.S. Treasury security with the maturity
closest to and less than the Remaining Average Life.
"Remaining Average Life" means, with respect to any Called
Principal, the number of years (calculated to the nearest
one-twelfth year) obtained by dividing (i) such Called
Principal into (ii) the sum of the products obtained by
multiplying (a) the principal component of each Remaining
Scheduled Payment with respect to such Called Principal by (b)
the number of years (calculated to the nearest one-twelfth
year) that will elapse between the Settlement Date with
respect to such Called Principal and the scheduled due date of
such Remaining Scheduled Payment.
"Remaining Scheduled Payments" means, with respect to the
Called Principal of any Note, all payments of such Called
Principal and interest thereon at a rate of 7% per annum that
would be due after the Settlement Date with respect to such
Called Principal if no payment of such Called Principal were
made prior to its scheduled due date, provided that if such
Settlement Date is not a date on which interest payments are
due to be made under the terms of the Notes, then the amount
of the next succeeding scheduled interest payment will be
reduced by the amount of interest accrued to such Settlement
Date and required to be paid on such Settlement Date pursuant
to ss.2.3 or 6.3.
"Settlement Date" means, with respect to the Called Principal
of any Note, the date on which such Called Principal is to be
prepaid pursuant to ss.2.3 or has become or is declared to be
immediately due and payable pursuant to ss.6.3, as the context
requires."
Section 2.19. Additional Amendment to Section 8.1. The term
"Subsidiary" contained in ss.8.1 shall be and is hereby amended in its entirety
to read as follows:
"The term "subsidiary" shall mean as to any particular parent
entity (i) any corporation of which more than 50% (by number of votes
of the Voting Stock shall be beneficially owned, directly or indirectly
by such parent or (ii) any partnership or limited liability company of
which more than 50% of the general partnership or limited liability
company equity interest is held by such parent. The term "Subsidiary"
shall mean a subsidiary of Company."
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Cleveland-Cliffs, Inc. First Amendment Agreement
Section 2.20. Additions to Section 8.1. Section 8.1 of the Existing
Note Agreements shall be and is hereby amended by adding the following
definitions thereto in alphabetical order:
"Bank Facility" shall mean a working capital facility which
(i) has an aggregate commitment of not more than $20,000,000, (ii) is
unsecured and subject to the Intercreditor Agreement, (iii) does not
have the benefit of any Guaranty other than the Bank Facility Guaranty,
and (iv) has been consented to by the Required Holders which consent
shall not be unreasonably withheld.
"Bank Facility Guaranty" shall mean a Guaranty of the
obligations of one or more of the Obligors of their respective
obligations under the Bank Facility which Guaranty shall be delivered
only by Subsidiary Guarantors and shall have been consented to by the
Required Holders, which consent shall not be unreasonably withheld and
shall be subject to the Intercreditor Agreement.
"Capital Stock" shall mean any and all shares, interests,
participations, rights or other equivalents (however designated) of
corporate stock or similar interests in any other form of entity,
including, without limitation, with respect to partnerships,
partnership interests (whether general or limited) and any other
interest or participation that confers on a Person the right to receive
a share of the profits and losses of, or distributions of assets of,
such partnership.
"Consolidated EBITDA" shall mean, for any period, Consolidated
Net Earnings for such period, plus (but without duplication), but only
to the extent deducted in determining Consolidated Net Earnings for
such period, (i) Consolidated Interest Charges (net of interest income)
for such period, (ii) depreciation and amortization taken by the
Company and its Subsidiaries during such period, (iii) any provision
for current and future income taxes for such period, determined on a
consolidated basis and, but only in the case of a determination of
Consolidated EBITDA for the period ending December 31, 2002, (iv)
non-cash charges taken by the Company and its Subsidiaries.
"Consolidated EBITDAR" shall mean, for any period, the sum of
(i) Consolidated EBITDA plus (but only to the extent deducted in
determining Consolidated EBITDA for such period) (ii) Operating Lease
Rentals.
"Consolidated Interest Charges" means, with respect to any
period, the sum (without duplication) of the following (in each case,
eliminating all offsetting debits and credits between the Company and
its Subsidiaries and all other items required to be eliminated in the
course of the preparation of consolidated financial statements of the
Company and its Subsidiaries in accordance with GAAP): (a) all interest
in respect of Indebtedness of the Company and its Subsidiaries
(including (i) imputed interest on rentals in respect of Capitalized
Leases, (ii) original issue discount and non-cash interest payments or
accruals on any Indebtedness, (iii) the interest portion of all
deferred payment obligations, and (iv) all commissions, discounts and
other fees and charges owed with respect to bankers' acceptances and
letters of credit financings and currency and interest swap and hedging
obligations, in each case to the extent attributable to such
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Cleveland-Cliffs, Inc. First Amendment Agreement
period) deducted in determining Consolidated Net Earnings for such
period, and (b) all debt discount and expense amortized or required to
be amortized in the determination of Consolidated Net Earnings for such
period.
"Excess Cash Flow" for any fiscal year shall mean Consolidated
EBITDA for such fiscal year, minus the sum of (a) the amount (not in
excess of $30,000,000 for 2003 or more than $40,000,000 for 2004) of
capital expenditures of the Company and its Subsidiaries in respect of
maintenance and not expansion for such fiscal year, (b) all principal
payments made on Debt for such fiscal year excluding principal payments
in respect of any revolving credit facility which does not permanently
reduce the aggregate commitment thereunder, (c) Consolidated Interest
Charges paid in cash for such fiscal year and (d) taxes imposed on or
measured by income or excess profits paid in cash during such fiscal
year, plus (or minus in the case of a decrease) any increase (or
decrease) of the changes in operating assets and liabilities as shown
on the consolidated cash flow statement of the Company for such fiscal
year. To the extent the foregoing calculation results in "Excess Cash
Flow" of less than $5,000,000, "Excess Cash Flow" for the subject
fiscal year shall be deemed to be zero.
"Financing Agreements" shall mean and include (i) the
Agreements, (ii) the Notes and (iii) the Subsidiary Guaranty and any
and all other documents, instruments or other agreements evidencing or
securing any obligation of any Obligor in respect of any of the
foregoing, in each case, as amended from time to time.
"First Amendment Agreement" shall mean the First Amendment
Agreement dated as of December 15, 2002 to the Note Agreements dated as
of December 15, 1995 between and among the Company and the holders.
"Fixed Charges" shall mean, with respect to any period, the
sum of (a) Consolidated Interest Charges for such period and (b)
Operating Lease Rentals for such period.
"Intercreditor Agreement" shall mean an intercreditor
agreement entered into by the holders of the Notes and the providers of
the Bank Facility reasonably satisfactory to all parties thereto
providing, generally, for a pari passu treatment with respect to the
Subsidiary Guaranty and the Bank Facility Guaranty for the benefit of
the holders of the Notes and the providers of the Bank Facility.
"Investment" means any investment, made in cash or by delivery
of property, by the Company or any of its Subsidiaries (i) in any
Person, whether by acquisition of stock, Indebtedness or other
obligation or Security, or by loan, Guaranty, advance, capital
contribution or otherwise, or (ii) in any property.
"Obligor" or "Obligors" shall mean and include the Company and
each Subsidiary Guarantor from time to time.
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Cleveland-Cliffs, Inc. First Amendment Agreement
"Operating Lease Rentals" means, with respect to any period,
the sum of the minimum amount of Rental and other obligations required
to be paid during such period by the Company or any Subsidiary as
lessee under all leases of real or personal property (other than
Capitalized Leases) having a term of at least six months (including
renewal periods at the sole option of the lessee) excluding any amounts
required to be paid by the lessee (whether or not therein designated as
rental or additional rental) (a) which are on account of maintenance
and repairs, insurance, taxes, assessments, water rates and similar
charges, or (b) which are based on profits, revenues or sales realized
by the lessee from the leased property or otherwise based on the
performance of the lessee.
"Preferred Stock" means any class of capital stock of a
corporation that is preferred over any other class of capital stock of
such corporation as to the payment of dividends or the payment of any
amount upon liquidation or dissolution of such corporation.
"Required Holders" means, at any time, the holders of at least
66-2/3% in principal amount of the Notes at the time outstanding
(exclusive of Notes then owned by the Company or any of its
Affiliates).
"Restricted Investments" means all Investments except the
following:
(a) property, plant and equipment to be used in the
ordinary course of business of the Company and its
Subsidiaries;
(b) current assets arising from the sale of goods and
services in the ordinary course of business of the Company and
its Subsidiaries;
(c) Investments from time to time in one or more of
the Subsidiaries disclosed on Exhibit 5.19;
(d) Investments existing on the date of the Closing
and disclosed in Exhibit 5.19;
(e) Investments in United States Governmental
Securities, provided that such obligations mature within 365
days from the date of acquisition thereof;
(f) Investments in certificates of deposit or
banker's acceptances issued by an Acceptable Bank, provided
that such obligations mature within 365 days from the date of
acquisition thereof;
(g) Investments in commercial paper given the highest
rating by a credit rating agency of recognized national
standing and maturing not more than 270 days from the date of
creation thereof;
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Cleveland-Cliffs, Inc. First Amendment Agreement
(h) Investments in money market mutual funds which
maintain a constant $1.00 net asset value and invest
substantially all of their assets in the Investments of the
type described in clauses (e), (f) and/or (g) above;
(i) Investments in Repurchase Agreements;
(j) Investments in tax-exempt obligations of any
state of the United States of America, or any municipality of
any such state, in each case rated "AA" or better by S&P,
"Aa2" or better by Moody's or an equivalent rating by any
other credit rating agency of recognized national standing,
provided that such obligations mature within 365 days from the
date of acquisition thereof; and
(k) Investments of the Company and its Subsidiaries
to make acquisitions of additional mining interests (including
liabilities such as Capitalized Rentals but excluding any
other Debt) provided (i) the aggregate amount of cash invested
in connection with such Investments pursuant to this clause
(j) shall not exceed at any time $5,000,000 and (ii) all such
Investments (in excess of $1,000,000 cash invested) pursuant
to this clause (k) shall be described in writing to the
holders of the Notes in reasonable detail not less than 15
days prior to making any such Investment; and
(l) Other Investments of the Company and its
Subsidiaries for strategic or commercial purposes provided,
that (i) the aggregate amount of cash invested in connection
with such investments pursuant to this clause (l) shall not
exceed at any time $15,000,000 minus the amount of cash
invested pursuant to clause (k) above, and (ii) all such
investments (in excess of $1,000,000 cash invested) pursuant
to this clause (l) shall be described in writing to the
holders of the Notes in reasonable detail not less than 15
days prior to making any such Investment.
As used in this definition of "Restricted Investments":
"Acceptable Bank" means any bank or trust company (i)
which is organized under the laws of the United States of
America or any State thereof, (ii) which has capital, surplus
and undivided profits aggregating at least $500,000,000 , and
(iii) whose long-term unsecured debt obligations (or the
long-term unsecured debt obligations of the bank holding
company owning all of the capital stock of such bank or trust
company) shall have been given a rating of "A" or better by
S&P, "A2" or better by Moody's or an equivalent rating by any
other credit rating agency of recognized national standing.
"Acceptable Broker-Dealer" means any Person other
than a natural person (i) which is registered as a broker or
dealer pursuant to the Securities and Exchange Act of 1934, as
amended, and (ii) whose long-term unsecured debt obligations
shall have been given a rating of "A" or better by S&P, "A2"
or better
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Cleveland-Cliffs, Inc. First Amendment Agreement
by Moody's or an equivalent rating by any other credit rating
agency of recognized national standing.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Repurchase Agreement" means any written agreement
(a) that provides for (i) the transfer of
one or more United States Governmental Securities in
an aggregate principal amount at least equal to the
amount of the Transfer Price (defined below) to the
Company or any of its Subsidiaries from an Acceptable
Bank or an Acceptable Broker-Dealer against a
transfer of funds (the "Transfer Price") by the
Company or such Subsidiary to such Acceptable Bank or
Acceptable Broker-Dealer, and (ii) a simultaneous
agreement by the Company or such Subsidiary, in
connection with such transfer of funds, to transfer
to such Acceptable Bank or Acceptable Broker-Dealer
the same or substantially similar United States
Governmental Securities for a price not less than the
Transfer Price plus a reasonable return thereon at a
date certain not later than 365 days after such
transfer of funds,
(b) in respect of which the Company or such
Subsidiary shall have the right, whether by contract
or pursuant to applicable law, to liquidate such
agreement upon the occurrence of any default
thereunder, and
(c) in connection with which the Company or
such Subsidiary, or an agent thereof, shall have
taken all action required by applicable law or
regulations to perfect a Lien in such United States
Governmental Securities.
"S&P" means Standard & Poor's Ratings Group, a
division of McGraw Hill, Inc.
"United States Governmental Security" means any
direct obligation of, or obligation guaranteed by, the United
States of America, or any agency controlled or supervised by
or acting as an instrumentality of the United States of
America pursuant to authority granted by the Congress of the
United States of America, so long as such obligation or
guarantee shall have the benefit of the full faith and credit
of the United States of America which shall have been pledged
pursuant to authority granted by the Congress of the United
States of America.
"Restricted Payment" shall mean the direct or indirect
declaration or payment of any dividend or the making of any
distribution or redemption on account of the Capital Stock of the
Company by the Company or any Subsidiary. "Restricted Payment" shall
not include (a) any distribution in the form of stock or other equity
interest, (b) any redemption or acquisition of stock or other equity
interest if such redemption or
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Cleveland-Cliffs, Inc. First Amendment Agreement
acquisition is either (i) solely in exchange for such stock or other
equity interest by the Company or Subsidiary making such redemption or
acquisition or (ii) from the net proceeds of a sale of such stock or
other equity interest by the Company or Subsidiary making such
redemption, which sale shall be made concurrently with such redemption
or acquisition and (c) any distribution by any Subsidiary to the
Company or a Wholly-Owned Subsidiary and any redemption of stock of any
Subsidiary by the Company or another Subsidiary.
"Subsidiary Guarantor" shall mean and include all Wholly-Owned
Subsidiaries organized under the laws of the United States, or any
state or territory thereof and each other Subsidiary organized under
the laws of the United States, or any state or territory thereof, which
other Subsidiary is not subject to legal or contractual prohibitions
prohibiting such Subsidiary from executing and delivering a Subsidiary
Guaranty, which legal or contractual prohibition was not incurred in
contemplation of such Subsidiary becoming a Subsidiary on or after
December 15, 2002. The Company agrees to use commercially reasonable
efforts to have any such prohibitation waived to the extent necessary
to permit such Subsidiary to execute and deliver the Subsidiary
Guaranty (which shall include an offer to defray reasonable legal or
administrative fees but shall not include any other consideration or
concessions).
"Subsidiary Guaranty" shall mean and include each Subsidiary
Guaranty from each Subsidiary Guarantor for the benefit of the holders
of the Notes from time to time substantially in the form of Exhibit B
hereto.
"Wholly-Owned Subsidiary" means, at any time, any Subsidiary
all of the Voting Stock (except directors' qualifying shares) of which
are owned by any one or more of the Company and the Company's other
Wholly-Owned Subsidiaries at such time.
Section 2.21. Exhibit and Schedules. All exhibits and schedules hereto
shall be deemed to be exhibits and schedules of the same designation to the Note
Agreements.
SECTION 3. CONDITIONS PRECEDENT
Section 3.1. This First Amendment Agreement shall not become effective
until, and shall become effective on, the Business Day when each of the
following conditions shall have been satisfied:
(a) Each holder shall have received this First Amendment
Agreement, duly executed by the Company.
(b) All holders shall have consented to this First Amendment
Agreement as evidenced by their execution thereof.
(c) Each holder shall have received the Subsidiary Guaranty,
duly executed by each Subsidiary Guarantor.
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Cleveland-Cliffs, Inc. First Amendment Agreement
(d) The representations and warranties of the Company set
forth in Section 4 hereof shall be true and correct in all material
respects as of the date of the execution and delivery of this First
Amendment Agreement.
(e) The representations and warranties of each Subsidiary
Guarantor in the Subsidiary Guaranty shall be true and correct in all
material respects as of the date of the execution and delivery of this
First Amendment Agreement.
(f) Any consents or approvals from any holder or holders of
any outstanding security of the Company or any Subsidiary and any
amendments of agreements pursuant to which any securities may have been
issued which shall be necessary to permit the consummation of the
transactions contemplated hereby shall have been obtained and all such
consents or amendments shall be reasonably satisfactory in form and
substance to the holders and their special counsel.
(g) Each holder shall have received such certificates of a
secretarial officer of the Company as it may reasonably request with
respect to this First Amendment Agreement and the transactions
contemplated hereby.
(h) Each holder shall have received such certificates of a
secretarial officer of each Subsidiary Guarantor as it may reasonably
request with respect to the Subsidiary Guaranty.
(i) Each holder shall have received the opinion of counsel
for the Company and the Subsidiary Guarantors covering the matters set
forth in Exhibits C-1 and C-2 hereto and such other matters incident to
the transactions contemplated hereby as the holders may reasonably
request.
(j) The Company shall have paid the fees and disbursements of
the holders' special counsel, Xxxxxxx and Xxxxxx, incurred in
connection with the negotiation, preparation, execution and delivery of
this First Amendment Agreement and the transactions contemplated hereby
which fees and disbursements are reflected in the statement of such
special counsel delivered to the Company at the time of the execution
and delivery of this First Amendment Agreement. Upon receipt of any
supplemental statement after the execution of this First Amendment
Agreement, the Company will pay such additional fees and disbursements
of the holders' special counsel which were not reflected in its
accounting records as of the time of the delivery of the initial
statement of fees and disbursements.
(k) The Company shall have paid to the holders, on a pro rata
basis based on the aggregate outstanding principal amounts of the Notes
held by said Noteholders on the date hereof, a non-refundable fee of
$1,225,000.
(l) A Private Placement Number issued by Standard & Poor's
CUSIP Service Bureau in cooperation with the Securities Valuation
Office of the National Association of Insurance Commissioners shall
have been obtained for the Notes.
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Cleveland-Cliffs, Inc. First Amendment Agreement
(m) The Company shall have prepaid, on a pro rata basis,
$15,000,000 aggregate principal amount of the Notes together with
accrued and unpaid interest on such principal amount to the date of
prepayment thereof.
(n) All corporate and other proceedings in connection with
the transactions contemplated by this First Amendment Agreement and all
documents and instruments incident to such transactions shall be
satisfactory to you and your special counsel, and you and your special
counsel shall have received all such counterpart originals or certified
or other copies of such documents as you or they may reasonably
request.
SECTION 4. REPRESENTATIONS AND WARRANTIES.
The Company hereby represents and warrants that as of the date hereof
and as of the date of execution and delivery of this First Amendment Agreement:
(a) Each Obligor is duly incorporated, validly existing and in
good standing under the laws of its state of incorporation.
(b) Each Obligor has the corporate power to own its property
and to carry on its business as now being conducted.
(c) Each Obligor is duly qualified and in good standing as a
foreign corporation authorized to do business in each jurisdiction in
which the failure to do so would, individually or in the aggregate,
have a material adverse effect on the business, condition (financial or
other), assets, operations, properties or prospects of such Obligor.
(d) This First Amendment Agreement and all other Financing
Agreements and the transactions contemplated hereby are within the
corporate powers of each Obligor, have been duly authorized by all
necessary corporate action on the part of each Obligor and this First
Amendment Agreement and all other Financing Agreements has been duly
executed and delivered by each Obligor and constitute legal, valid and
binding obligations of each Obligor enforceable in accordance with
their respective terms.
(e) The Company represents and warrants that there are no
Defaults or Events of Default under the Existing Note Agreements
including, without limitation, under ss.ss.5.5 and 5.10 of the Existing
Note Agreements. Asset dispositions of the Company and its Subsidiaries
subject to ss.ss.5.10(b) and (c) of the Existing Note Agreements did
not exceed $8,500,000 for the twelve month period ending December 15,
2002.
(f) The execution, delivery and performance of this First
Amendment Agreement and all other Financing Agreements by each Obligor
does not and will not result in a violation of or default under (A) the
articles of incorporation or bylaws of such Obligor, (B) any material
agreement to which such Obligor is a party or by which it is bound or
to which such Obligor or any of its properties is subject, (C) any
material order, writ, injunction or decree binding on such Obligor, or
(D) any material statute, regulation, rule or other law applicable to
such Obligor.
-22-
Cleveland-Cliffs, Inc. First Amendment Agreement
(g) No authorization, consent, approval, exemption or action
by or notice to or filing with any court or administrative or
governmental body (other than periodic filings with regulatory
authorities, none of which are required to be filed as of the effective
date of this First Amendment Agreement) is required in connection with
the execution and delivery of this First Amendment Agreement or any
other Financing Agreements or the consummation of the transactions
contemplated thereby.
SECTION 5. MISCELLANEOUS
Section 5.1. Except as amended herein, all terms and provisions of the
Existing Note Agreements, the Existing Notes and related agreements and
instruments are hereby ratified, confirmed and approved in all respects.
Section 5.2. Any and all notices, requests, certificates and other
instruments, including the Notes, may refer to any of the Financing Agreements
without making specific reference to this First Amendment Agreement, but
nevertheless all such references shall be deemed to include this First Amendment
Agreement unless the context shall otherwise require. Your acceptance hereof
will also constitute your agreement that prior to any sale, assignment,
transfer, pledge or other disposition by you of any Notes, you shall either (i)
impose on the Notes so to be disposed of an appropriate endorsement referring to
this First Amendment Agreement as binding on the parties hereto and upon any and
all future holders of such Notes or (ii) at your option at any time, surrender
such Notes for new Notes of the same form and tenor as the Notes so surrendered
but revised to contain express textual reference to this First Amendment
Agreement. All expenses for the preparation of such new Notes and the exchange
for such new Notes are to be borne by the Company.
Section 5.3. This First Amendment Agreement and all covenants herein
contained shall be binding upon and inure to the benefit of the respective
successors and assigns of the parties hereunder. All covenants made by the
Company herein shall survive the closing and the delivery of this First
Amendment Agreement.
Section 5.4. This First Amendment Agreement shall be governed by and
construed in accordance with Illinois law.
Section 5.5. The capitalized terms used in this First Amendment
Agreement shall have the respective meanings specified in the Note Agreements
unless otherwise herein defined, or the context hereof shall otherwise require.
-23-
Cleveland-Cliffs, Inc. First Amendment Agreement
The execution hereof by the holders shall constitute a contract among
the Company and the holders for the uses and purposes hereinabove set forth.
This First Amendment Agreement may be executed in any number of counterparts,
each executed counterpart constituting an original but all together only one
agreement.
CLEVELAND-CLIFFS INC
By: /s/ Xxxxxxx X. Xxxxx
------------------------
Xxxxxxx X. Xxxxx, Senior Vice President-
Finance
Acknowledged and agreed to as of December 15, 2002
CLEVELAND-CLIFFS ORE CORPORATION
By: /s/ X. Xxxxx
------------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
CLEVELAND-CLIFFS IRON COMPANY
By: /s/ X. Xxxxx
------------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
NORTHSHORE SALES COMPANY
By /s/ X. Xxxxx
------------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
WABUSH IRON CO. LIMITED
By: /s/ X. Xxxxx
------------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
-24-
Cleveland-Cliffs, Inc. First Amendment Agreement
CLIFFS OIL SHALE CORP.
By: /s/ X. Xxxxx
------------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
CLIFFS ERIE L.L.C.
By: /s/ X. Xxxxx
------------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
CLIFFS MINING COMPANY
By: /s/ X. Xxxxx
------------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
CLIFFS MINING SERVICES COMPANY
By: /s/ X. Xxxxx
------------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
CLIFFS REDUCED IRON CORPORATION
By: /s/ X. Xxxxx
------------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
CLIFFS REDUCED IRON MANAGEMENT COMPANY
By: /s/ X. Xxxxx
------------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
-25-
Cleveland-Cliffs, Inc. First Amendment Agreement
IRONUNITS LLC
By: /s/ X. Xxxxx
------------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
NORTHSHORE MINING COMPANY
By: /s/ X. Xxxxx
------------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
SEIGNELAY RESOURCES, INC.
By: /s/ X. Xxxxx
------------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
SILVER BAY POWER COMPANY
By: /s/ X. Xxxxx
------------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
THE CLEVELAND-CLIFFS STEAMSHIP COMPANY
By: /s/ X. Xxxxx
------------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
CLIFFS BIWABIK ORE CORPORATION
By: /s/ X. Xxxxx
------------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
-26-
Cleveland-Cliffs, Inc. First Amendment Agreement
PICKANDS HIBBING CORPORATION
By: /s/ X. Xxxxx
------------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
SYRACUSE MINING COMPANY
By: /s/ X. Xxxxx
------------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
CLIFFS EMPIRE, INC.
By: /s/ X. Xxxxx
------------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
CLIFFS IH EMPIRE, INC.
By: /s/ X. Xxxxx
------------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
CLIFFS MARQUETTE, INC.
By: /s/ X. Xxxxx
------------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
CLIFFS MC EMPIRE, INC.
By: /s/ X. Xxxxx
------------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
-27-
Cleveland-Cliffs, Inc. First Amendment Agreement
CLIFFS TIOP, INC.
By: /s/ X. Xxxxx
------------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
LAKE SUPERIOR & ISHPEMING RAILROAD
COMPANY
By: /s/ X. Xxxxx
------------------------
Name: Xxxxxx Xxxxx
Title: Assistant Treasurer
LASCO DEVELOPMENT CORPORATION
By: /s/ X. Xxxxx
------------------------
Name: Xxxxxx Xxxxx
Title: Assistant Treasurer
EMPIRE-CLIFFS PARTNERSHIP
BY: CLIFFS EMPIRE, INC.,
Its General Partner
By: /s/ X. Xxxxx
------------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
MARQUETTE IRON MINING PARTNERSHIP
BY: CLEVELAND-CLIFFS ORE CORPORATION
Its General Partner
By: /s/ X. Xxxxx
------------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
-28-
Cleveland-Cliffs, Inc. First Amendment Agreement
WHEELING-PITTSBURGH/CLIFFS PARTNERSHIP
BY: CLIFFS EMPIRE, INC.,
its General Partner
By: /s/ X. Xxxxx
------------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
CLIFFS SYNFUEL CORP.
By: /s/ X. Xxxxx
------------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
-29-
Cleveland-Cliffs, Inc. First Amendment Agreement
This foregoing First Amendment Agreement is hereby accepted and agreed
to as of the date aforesaid. The execution by each holder listed below shall
constitute its respective several and not joint confirmation that it is the
owner and holder of the Notes set opposite its name on Schedule I hereto and
that it has not sold or otherwise transferred any of the Notes originally
purchased by it pursuant to the Note Agreements.
J. ROMEO & CO.
By /s/ X. X. Xxxxx
-----------------------
Name: X. X. Xxxxx
Title: A Partner, J Romeo & Co.
-30-
Cleveland-Cliffs, Inc. First Amendment Agreement
This foregoing First Amendment Agreement is hereby accepted and agreed
to as of the date aforesaid. The execution by each holder listed below shall
constitute its respective several and not joint confirmation that it is the
owner and holder of the Notes set opposite its name on Schedule I hereto and
that it has not sold or otherwise transferred any of the Notes originally
purchased by it pursuant to the Note Agreements.
THE VARIABLE ANNUITY LIFE INSURANCE
COMPANY
By AIG Global Investment Corp., investment
adviser
By /s/ Xxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
-31-
Cleveland-Cliffs, Inc. First Amendment Agreement
This foregoing First Amendment Agreement is hereby accepted and agreed
to as of the date aforesaid. The execution by each holder listed below shall
constitute its respective several and not joint confirmation that it is the
owner and holder of the Notes set opposite its name on Schedule I hereto and
that it has not sold or otherwise transferred any of the Notes originally
purchased by it pursuant to the Note Agreements.
RELIASTAR LIFE INSURANCE COMPANY
f.k.a. NORTHERN LIFE INSURANCE COMPANY
By: ING Investment Management LLC, as Agent
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
RELIASTAR LIFE INSURANCE COMPANY
By: ING Investment Management LLC, as
Agent
By: /s/ Xxxxx X. Xxxxxxx
------------------------------
Name:Xxxxx X. Xxxxxxx
Title: Senior Vice President
-32-
Cleveland-Cliffs, Inc. First Amendment Agreement
This foregoing First Amendment Agreement is hereby accepted and agreed
to as of the date aforesaid. The execution by each holder listed below shall
constitute its respective several and not joint confirmation that it is the
owner and holder of the Notes set opposite its name on Schedule I hereto and
that it has not sold or otherwise transferred any of the Notes originally
purchased by it pursuant to the Note Agreements.
FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY
By /s/ Xxxxx X. Xxxxx
------------------
Name: Xxxxx X. Xxxxx
Title: Assistant Vice President
-33-
Cleveland-Cliffs, Inc. First Amendment Agreement
This foregoing First Amendment Agreement is hereby accepted and agreed
to as of the date aforesaid. The execution by each holder listed below shall
constitute its respective several and not joint confirmation that it is the
owner and holder of the Notes set opposite its name on Schedule I hereto and
that it has not sold or otherwise transferred any of the Notes originally
purchased by it pursuant to the Note Agreements.
SUN LIFE ASSURANCE COMPANY OF CANADA
By /s/ X. X. Xxxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President, U.S. Private
Placements for President
By /s/ Xxxxxxx XxXxxxxx
-------------------------------
Name: Xxxxxxx XxXxxxxx
Title: Counsel - for Secretary
SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
By /s/ X. X. Xxxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President, U.S.
Private Placements for President
By /s/ Xxxxxxx XxXxxxxx
-------------------------------
Name: Xxxxxxx XxXxxxxx
Title: Counsel - for Secretary
CLARICA LIFE INSURANCE COMPANY
(U.S. BRANCH)
By /s/ X. X. Xxxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President, U.S. Private Placements
for President
By /s/ Xxxxxxx XxXxxxxx
-------------------------------
Name: Xxxxxxx XxXxxxxx
Title: Counsel - for Secretary
-34-
Cleveland-Cliffs, Inc. First Amendment Agreement
This foregoing First Amendment Agreement is hereby accepted and agreed
to as of the date aforesaid. The execution by each holder listed below shall
constitute its respective several and not joint confirmation that it is the
owner and holder of the Notes set opposite its name on Schedule I hereto and
that it has not sold or otherwise transferred any of the Notes originally
purchased by it pursuant to the Note Agreements.
THE GREAT SOUTHERN LIFE INSURANCE CO.
By /s/ Xxxx Xxxxxxxx
-----------------------------
Name: Xxxx Xxxxxxxx
Title: Vice President-Investments
-35-
Cleveland-Cliffs, Inc. First Amendment Agreement
This foregoing First Amendment Agreement is hereby accepted and agreed
to as of the date aforesaid. The execution by each holder listed below shall
constitute its respective several and not joint confirmation that it is the
owner and holder of the Notes set opposite its name on Schedule I hereto and
that it has not sold or otherwise transferred any of the Notes originally
purchased by it pursuant to the Note Agreements.
THE UNION CENTRAL LIFE INSURANCE COMPANY
By /s/ Xxxx X. Xxxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Second Vice President
-36-
Cleveland-Cliffs, Inc. First Amendment Agreement
This foregoing First Amendment Agreement is hereby accepted and agreed
to as of the date aforesaid. The execution by each holder listed below shall
constitute its respective several and not joint confirmation that it is the
owner and holder of the Notes set opposite its name on Schedule I hereto and
that it has not sold or otherwise transferred any of the Notes originally
purchased by it pursuant to the Note Agreements.
PAN-AMERICAN LIFE INSURANCE COMPANY
By /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President, Securities
-37-
Cleveland-Cliffs, Inc. First Amendment Agreement
This foregoing First Amendment Agreement is hereby accepted and agreed
to as of the date aforesaid. The execution by each holder listed below shall
constitute its respective several and not joint confirmation that it is the
owner and holder of the Notes set opposite its name on Schedule I hereto and
that it has not sold or otherwise transferred any of the Notes originally
purchased by it pursuant to the Note Agreements.
STANDARD INSURANCE COMPANY
By /s/ Xxxxx Xxxxxxxxxx
-------------------------------
Name: Xxxxx Xxxxxxxxxx
Title: Assistant Vice President
-38-
Cleveland-Cliffs, Inc. First Amendment Agreement
This foregoing First Amendment Agreement is hereby accepted and agreed
to as of the date aforesaid. The execution by each holder listed below shall
constitute its respective several and not joint confirmation that it is the
owner and holder of the Notes set opposite its name on Schedule I hereto and
that it has not sold or otherwise transferred any of the Notes originally
purchased by it pursuant to the Note Agreements.
WOODMEN ACCIDENT AND LIFE COMPANY
By /s/ Xxxxxx Xxxxx
--------------------------------
Name: Xxxxxx Xxxxx
Title: Director, Securities Investments,
Chief Investment Officer & Asst.
Treasurer
-39-
OUTSTANDING PRINCIPAL AMOUNT
AND SERIES OF NOTES
NAME OF HOLDER HELD AS OF DECEMBER 14, 2002
J. ROMEO & CO. $10,000,000
J. ROMEO & CO. $4,000,000
J. ROMEO & CO. $1,000,000
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY $10,000,000
NORTHERN LIFE INSURANCE COMPANY $5,000,000
NORTHWESTERN NATIONAL LIFE INSURANCE COMPANY $4,500,000
FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY $4,500,000
ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY $5,000,000
SUN LIFE ASSURANCE COMPANY OF CANADA $3,000,000
$1,000,000
$1,000,000
SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) $1,000,000
U.S. BRANCH OF CLARICA LIFE INSURANCE COMPANY $1,000,000
PEBBLE CHART & CO. (as nominee for Great Southern Life Insurance $5,000,000
Company)
HARE & CO. (as nominee for The Union Central Life Insurance $4,500,000
Company)
PAN-AMERICAN LIFE INSURANCE COMPANY $4,500,000
HARE & CO (as nominee for Standard Insurance Company) $2,500,000
WOODMEN ACCIDENT AND LIFE COMPANY $2,500,000
SCHEDULE I
(to First Amendment Agreement)
CLEVELAND-CLIFFS INC
Senior Note
Due December 15, 2005
No.
_________, 20__
$
CLEVELAND-CLIFFS INC, an Ohio corporation (the "Company"), for value
received, hereby promises to pay to
or registered assigns
on the fifteenth day of December, 2005
the principal amount of
DOLLARS ($____________)
and to pay interest (computed on the basis of a 360-day year of twelve 30-day
months) on the principal amount from time to time remaining unpaid hereon at the
rate of (i) 7.00% per annum from the date hereof until December 14, 2003, and
(ii) 9.50% per annum from December 15, 2003 until December 14, 2004 and (iii)
10.50% per annum from December 15, 2004 until maturity, payable semi-annually on
the fifteenth day of each June and December in each year (commencing on the
first of such dates after the date hereof) and at maturity. The Company agrees
to pay interest on overdue principal (including any overdue required or optional
prepayment of principal) Make-Whole Amount, if any, and (to the extent legally
enforceable) on any overdue installment of interest, at the rate of (i) 9.00%
per annum after the due date during the period from the date hereof until
December 14, 2003 and (ii) 11.50% per annum after the due date during the period
from December 15, 2003 until December 14, 2004 and (iii) 12.50% per annum after
the due date during the period from December 15, 2004 until maturity, whether by
acceleration or otherwise, until paid. Both the principal hereof and interest
hereon are payable at the principal office of the Company in Cleveland, Ohio in
coin or currency of the United States of America which at the time of payment
shall be legal tender for the payment of public and private debts.
This Note is one of the Senior Notes due December 15, 2005 (the
"Notes") of the Company in the aggregate principal amount of $70,000,000 issued
or to be issued under and pursuant to the terms and provisions of the separate
Note Agreements, each dated as of December 15, 1995 (the "Note Agreements"),
entered into by the Company with the original Purchasers therein referred to and
this Note and the holder hereof are entitled equally and ratably
EXHIBIT A
(to First Amendment Agreement)
with the holders of all other Notes outstanding under the Note Agreements to all
the benefits provided for thereby or referred to therein including, without
limitation, the benefits and security of all other Financing Agreements (as
defined in the Note Agreements). Reference is hereby made to the Financing
Agreements for a statement of such rights and benefits.
This Note and the other Notes outstanding under the Note Agreements may
be declared due prior to their expressed maturity dates and certain prepayments
are required to be made thereon, all in the events, on the terms and in the
manner and amounts as provided in the Note Agreements.
The Notes are not subject to prepayment or redemption at the option of
the Company prior to their expressed maturity dates except on the terms and
conditions and in the amounts and with the Make-Whole Amount, if any, set forth
in the Note Agreements.
This Note is registered on the books of the Company and is transferable
only by surrender thereof at the principal office of the Company duly endorsed
or accompanied by a written instrument of transfer duly executed by the
registered holder of this Note or its attorney duly authorized in writing.
Payment of or on account of principal, Make-Whole Amount, if any, and interest
on this Note shall be made only to or upon the order in writing of the
registered holder.
CLEVELAND-CLIFFS INC
By ______________________
Its
A-2
FORM OF SUBSIDIARY GUARANTY
EXHIBIT B
(to First Amendment Agreement)
================================================================================
SUBSIDIARY GUARANTY AGREEMENT
Dated as of December 15, 2002
$70,000,000 7.00% Senior Notes, due December 15, 2005
of
CLEVELAND-CLIFFS INC
================================================================================
EXHIBIT B
(to Note Purchase Agreements)
TABLE OF CONTENTS
(Not a part of the Agreement)
SECTION HEADING PAGE
Parties......................................................................1
Recitals.....................................................................1
SECTION 1. DEFINITIONS................................................2
SECTION 2. GUARANTY OF NOTES AND NOTE AGREEMENTS......................2
SECTION 3. GUARANTY OF PAYMENT AND PERFORMANCE........................2
SECTION 4. GENERAL PROVISIONS RELATING TO THE GUARANTY................3
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE GUARANTORS...........8
SECTION 6. GUARANTOR COVENANTS........................................9
SECTION 7. GOVERNING LAW..............................................9
SECTION 8. AMENDMENTS, WAIVERS AND CONSENTS..........................10
SECTION 9. NOTICES...................................................10
SECTION 10. MISCELLANEOUS.............................................11
SECTION 11. INDEMNITY.................................................12
Signature...................................................................13
-i-
SUBSIDIARY GUARANTY AGREEMENT
$70,000,000 7.00% Senior Notes, due December 15, 2005
This SUBSIDIARY GUARANTY AGREEMENT dated as of December 15, 2002 (the or
this "Guaranty") is entered into on a joint and several basis by the
undersigned, together with any entity which may become a party hereto by
execution and delivery of a Subsidiary Guaranty Supplement in substantially the
form set forth as EXHIBIT A hereto (a "Guaranty Supplement") (which parties are
hereinafter referred to individually as a "Guarantor" and collectively as the
"Guarantors").
RECITALS
A. Each Guarantor is a subsidiary or affiliate of Cleveland-Cliffs
Inc, an Ohio corporation (the "Obligor").
B. The Obligor has entered into those certain separate Note Agreements
each dated as of December 15, 1995 (the "Existing Note Agreements") among the
Obligor and each of the purchasers named on Schedule I thereto (the "Initial
Note Purchasers"; the Initial Note Purchasers, together with their successors,
assigns or any other future holder of the Notes (as defined below), the
"Holders"), providing for, inter alia, the issue and sale by the Obligor to the
Initial Note Purchasers of $70,000,000 aggregate principal amount of their 7.00%
Senior Notes due December 15, 2005 (the "Notes").
C. The Obligor desires the Holders to enter into that certain First
Amendment Agreement dated as of December 15, 2002 (the Existing Note Agreements,
as amended by the First Amendment Agreement are hereby referred to as the "Note
Agreements"). The Holders have required as a condition to their execution of the
First Amendment Agreement that the Obligor cause the undersigned to enter into
this Guaranty and cause each entity that becomes a Subsidiary Guarantor (as
defined in the Note Agreements) after December 15, 2002 to enter into a Guaranty
Supplement, in each case as security for the Notes, and the Obligor has agreed
to cause the undersigned to execute this Guaranty and to cause such Subsidiaries
to execute a Guaranty Supplement, in each case in order to induce the Holders to
execute the First Amendment Agreement and thereby benefit the Holder and its
Subsidiaries.
D. Each of the Guarantors will derive substantial direct and indirect
benefit from the execution of the First Amendment Agreement by the Holders.
NOW, THEREFORE, as required by Section 5.21 of the Note Agreements and in
consideration of the premises and other good and valuable consideration, the
receipt and sufficiency whereof are hereby acknowledged, each Guarantor does
hereby covenant and agree, jointly and severally, as follows:
SECTION 1. DEFINITIONS.
Capitalized terms used herein shall have the meanings set forth in the
Note Agreements unless herein defined or the context shall otherwise require.
SECTION 2. GUARANTY OF NOTES AND NOTE AGREEMENTS
(a) Each Guarantor jointly and severally does hereby irrevocably,
absolutely and unconditionally guarantee unto the Holders: (1) the full and
prompt payment of the principal of, premium, if any, and interest on the Notes
from time to time outstanding, as and when such payments shall become due and
payable whether by lapse of time, upon redemption or prepayment, by extension or
by acceleration or declaration or otherwise (including (to the extent legally
enforceable) interest due on overdue payments of principal, premium, if any, or
interest at the rate set forth in the Notes) in Federal or other immediately
available funds of the United States of America which at the time of payment or
demand therefor shall be legal tender for the payment of public and private
debts, (2) the full and prompt performance and observance by the Obligor of each
and all of the obligations, covenants and agreements required to be performed or
owed by the Obligor under the terms of the Notes, the Note Agreements and any
other Financing Agreements of the Obligor and (3) the full and prompt payment,
upon demand by any Holder of all costs and expenses, legal or otherwise
(including reasonable attorneys' fees), if any, as shall have been expended or
incurred in the enforcement of any rights, privileges or liabilities in favor of
the Holders under or in respect of the Notes, the Note Agreements and any other
Financing Agreements of the Obligor or under this Guaranty or in any
consultation or action in connection therewith or herewith.
(b) The liability of each Guarantor under this Guaranty shall not exceed an
amount equal to a maximum amount as will, after giving effect to such maximum
amount and all other liabilities of such Guarantor, contingent or otherwise,
result in the obligations of such Guarantor hereunder not constituting a
fraudulent transfer, obligation or conveyance.
SECTION 3. GUARANTY OF PAYMENT AND PERFORMANCE
This is a guarantee of payment and performance and each Guarantor hereby
waives, to the fullest extent permitted by law, any right to require that any
action on or in respect of any Note or the Note Agreements or any other
Financing Agreement be brought against the Obligor or any other Person or that
resort be had to any direct or indirect security for the Financing Agreement or
any other remedy. Any Holder may, at its option, proceed hereunder against any
Guarantor in the first instance to collect monies when due, the payment of which
is guaranteed hereby, without first proceeding against the Obligor or any other
Person and without first resorting to any direct or indirect security for the
Notes or for this Guaranty or any other remedy. The liability of each Guarantor
hereunder shall in no way be affected or impaired by any acceptance by any
Holder of any direct or indirect security for, or other guaranties of, any
Indebtedness, liability or obligation of the Obligor or any other Person to any
Holder or by any failure, delay, neglect or omission by any Holder to realize
upon or protect any such guarantees, Indebtedness, liability or obligation or
any notes or other instruments evidencing the same or any
-2-
direct or indirect security therefor or by any approval, consent, waiver, or
other action taken, or omitted to be taken by any such Holder.
The covenants and agreements on the part of the Guarantors herein
contained shall take effect as joint and several covenants and agreements, and
references to the Guarantors shall take effect as references to each of them and
none of them shall be released from liability hereunder by reason of the
guarantee ceasing to be binding as a continuing security on any other of them.
SECTION 4. GENERAL PROVISIONS RELATING TO THE GUARANTY.
(a) Each Guarantor hereby consents and agrees that any Holder or Holders
from time to time, with or without any further notice to or assent from any
other Guarantor may, without in any manner affecting the liability of any
Guarantor under this Guaranty, and upon such terms and conditions as any such
Holder or Holders may deem advisable:
(1) extend in whole or in part (by renewal or otherwise), modify,
change, compromise, release or extend the duration of the time for the
performance or payment of any Indebtedness, liability or obligation of the
Obligor or of any other Person secondarily or otherwise liable for any
Indebtedness, liability or obligations of the Obligor on the Notes, or
waive any Default with respect thereto, or waive, modify, amend or change
any provision of any other agreement or waive this Guaranty; or
(2) sell, release, surrender, modify, impair, exchange or substitute
any and all property, of any nature and from whomsoever received, held by,
or for the benefit of, any such Holder as direct or indirect security for
the payment or performance of any Indebtedness, liability or obligation of
the Obligor or of any other Person secondarily or otherwise liable for any
Indebtedness, liability or obligation of the Obligor on the Notes; or
(3) settle, adjust or compromise any claim of the Obligor against
any other Person secondarily or otherwise liable for any Indebtedness,
liability or obligation of the Obligor on the Notes.
Each Guarantor hereby ratifies and confirms any such extension, renewal,
change, sale, release, waiver, surrender, exchange, modification, amendment,
impairment, substitution, settlement, adjustment or compromise and that the same
shall be binding upon it, and hereby waives, to the fullest extent permitted by
law, any and all defenses, counterclaims or offsets which it might or could have
by reason thereof, it being understood that such Guarantor shall at all times be
bound by this Guaranty and remain liable hereunder.
(b) Each Guarantor hereby waives, to the fullest extent permitted by law:
(1) notice of acceptance of this Guaranty by the Holders or of the
creation, renewal or accrual of any liability of the Obligor, present or
future, or of the reliance of such Holders upon this Guaranty (it being
understood that every Indebtedness, liability
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and obligation described in SECTION 2 hereof shall conclusively be
presumed to have been created, contracted or incurred in reliance upon the
execution of this Guaranty);
(2) demand of payment by any Holder from the Obligor or any other
Person indebted in any manner on or for any of the Indebtedness,
liabilities or obligations hereby guaranteed; and
(3) presentment for the payment by any Holder or any other Person of
the Notes or any other instrument, protest thereof and notice of its
dishonor to any party thereto and to such Guarantor.
The obligations of each Guarantor under this Guaranty and the rights of
any Holder to enforce such obligations by any proceedings, whether by action at
law, suit in equity or otherwise, shall not be subject to any reduction,
limitation, impairment or termination, whether by reason of any claim of any
character whatsoever or otherwise and shall not be subject to any defense,
set-off, counterclaim (other than any compulsory counterclaim), recoupment or
termination whatsoever.
(c) The obligations of the Guarantors hereunder shall be binding upon the
Guarantors and their successors and assigns, and shall remain in full force and
effect irrespective of:
(1) the genuineness, validity, regularity or enforceability of the
Notes, the Note Agreements or any other Financing Agreement or any of the
terms of any thereof, the continuance of any obligation on the part of the
Obligor or any other Person on or in respect of the Notes or under the
Financing Agreements or any other agreement or the power or authority or
the lack of power or authority of the Obligor to issue the Notes or the
Obligor to execute and deliver the Financing Agreements or any other
agreement or of any Guarantor to execute and deliver this Guaranty or to
perform any of its obligations hereunder or the existence or continuance
of an Obligor or any other Person as a legal entity; or
(2) any default, failure or delay, willful or otherwise, in the
performance by the Obligor, any Guarantor or any other Person of any
obligations of any kind or character whatsoever under the Notes, the
Financing Agreements, this Guaranty or any other agreement; or
(3) any creditors' rights, bankruptcy, receivership or other
insolvency proceeding of the Obligor, any Guarantor or any other Person or
in respect of the property of the Obligor, any Guarantor or any other
Person or any merger, consolidation, reorganization, dissolution,
liquidation, the sale of all or substantially all of the assets of or
winding up of the Obligor, any Guarantor or any other Person; or
(4) impossibility or illegality of performance on the part of the
Obligor, any Guarantor or any other Person of its obligations under the
Notes, the Financing Agreements, this Guaranty or any other agreements; or
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(5) in respect of the Obligor or any other Person, any change of
circumstances, whether or not foreseen or foreseeable, whether or not
imputable to the Obligor or any other Person, or other impossibility of
performance through fire, explosion, accident, labor disturbance, floods,
droughts, embargoes, wars (whether or not declared), civil commotion, acts
of God or the public enemy, delays or failure of suppliers or carriers,
inability to obtain materials, action of any Federal or state regulatory
body or agency, change of law or any other causes affecting performance,
or any other force majeure, whether or not beyond the control of the
Obligor or any other Person and whether or not of the kind hereinbefore
specified; or
(6) any attachment, claim, demand, charge, Lien, order, process,
encumbrance or any other happening or event or reason, similar or
dissimilar to the foregoing, or any withholding or diminution at the
source, by reason of any taxes, assessments, expenses, Indebtedness,
obligations or liabilities of any character, foreseen or unforeseen, and
whether or not valid, incurred by or against the Obligor, any Guarantor or
any other Person or any claims, demands, charges or Liens of any nature,
foreseen or unforeseen, incurred by the Obligor, any Guarantor or any
other Person, or against any sums payable in respect of the Notes or under
the Financing Agreements or this Guaranty, so that such sums would be
rendered inadequate or would be unavailable to make the payments herein
provided; or
(7) any order, judgment, decree, ruling or regulation (whether or
not valid) of any court of any nation or of any political subdivision
thereof or any body, agency, department, official or administrative or
regulatory agency of any thereof or any other action, happening, event or
reason whatsoever which shall delay, interfere with, hinder or prevent, or
in any way adversely affect, the performance by the Obligor, any Guarantor
or any other Person of its respective obligations under or in respect of
the Notes, the Financing Agreements, this Guaranty or any other agreement;
or
(8) the failure of any Guarantor to receive any benefit from or
as a result of its execution, delivery and performance of this
Guaranty; or
(9) any failure or lack of diligence in collection or protection,
failure in presentment or demand for payment, protest, notice of protest,
notice of default and of nonpayment, any failure to give notice to any
Guarantor of failure of the Obligor, any Guarantor or any other Person to
keep and perform any obligation, covenant or agreement under the terms of
the Notes, the Financing Agreements, this Guaranty or any other agreement
or failure to resort for payment to the Obligor, any Guarantor or to any
other Person or to any other guaranty or to any property, security, Liens
or other rights or remedies; or
(10) the acceptance of any additional security or other guaranty, the
advance of additional money to the Obligor or any other Person, the
renewal or extension of the Notes or amendments, modifications, consents
or waivers with respect to the Notes, the Financing Agreements or any
other agreement, or the sale, release, substitution or exchange of any
security for the Notes; or
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(11) any merger or consolidation of the Obligor, any Guarantor or any
other Person into or with any other Person or any sale, lease, transfer or
other disposition of any of the assets of the Obligor, any Guarantor or
any other Person to any other Person, or any change in the ownership of
any shares or partnership interests of the Obligor, any Guarantor or any
other Person; or
(12) any defense whatsoever that: (i) the Obligor or any other Person
might have to the payment of the Notes (principal, premium, if any, or
interest), other than payment thereof in Federal or other immediately
available funds, or (ii) the Obligor or any other Person might have to the
performance or observance of any of the provisions of the Notes, the Note
Agreements or any other agreement, whether through the satisfaction or
purported satisfaction by the Obligor or any other Person of its debts due
to any cause such as bankruptcy, insolvency, receivership, merger,
consolidation, reorganization, dissolution, liquidation, winding-up or
otherwise, other than the defense of indefeasible payment in full in cash
of the Notes; or
(13) any act or failure to act with regard to the Notes, the
Financing Agreements, this Guaranty or any other agreement or anything
which might vary the risk of any Guarantor or any other Person; or
(14) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, any Guarantor or any other Person
in respect of the obligations of any Guarantor or other Person under this
Guaranty or any other agreement, other than the defense of indefeasible
payment in full in cash of the Notes;
provided that the specific enumeration of the above-mentioned acts, failures or
omissions shall not be deemed to exclude any other acts, failures or omissions,
though not specifically mentioned above, it being the purpose and intent of this
Guaranty and the parties hereto that the obligations of each Guarantor shall be
absolute and unconditional and shall not be discharged, impaired or varied
except by the payment of the principal of, premium, if any, and interest on the
Notes in accordance with their respective terms whenever the same shall become
due and payable as in the Notes provided, at the place specified in and all in
the manner and with the effect provided in the Notes and the Financing
Agreements, as each may be amended or modified from time to time. Without
limiting the foregoing, it is understood that repeated and successive demands
may be made and recoveries may be had hereunder as and when, from time to time,
the Obligor shall default under or in respect of the terms of the Notes or the
Financing Agreements and that notwithstanding recovery hereunder for or in
respect of any given default or defaults by the Obligor under the Notes or the
Financing Agreements, this Guaranty shall remain in full force and effect and
shall apply to each and every subsequent default.
(d) All rights of any Holder may be transferred or assigned at any time in
accordance with the Note Agreements and shall be considered to be transferred or
assigned at any time or from time to time upon the transfer of such Note in
accordance with the Note Agreements whether with or without the consent of or
notice to the Guarantors under this Guaranty.
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(e) To the extent of any payments made under this Guaranty, the Guarantors
shall be subrogated to the rights of the Holder or Holders upon whose Notes such
payment was made, but each Guarantor covenants and agrees that such right of
subrogation shall be junior and subordinate in right of payment to the prior
indefeasible final payment in cash in full of all amounts due and owing by the
Obligor with respect to the Notes and the Financing Agreements and by the
Guarantors under this Guaranty, and the Guarantors shall not take any action to
enforce such right of subrogation, and the Guarantors shall not accept any
payment in respect of such right of subrogation, until all amounts due and owing
by the Obligor under or in respect of the Notes and the Financing Agreements and
all amounts due and owing by the Guarantors hereunder have indefeasibly been
paid in cash in full. If any amount shall be paid to any Guarantor in violation
of the preceding sentence at any time prior to the indefeasible payment in cash
in full of the Notes and all other amounts payable under the Notes, the
Financing Agreements and this Guaranty, such amount shall be held in trust for
the benefit of the Holders and shall forthwith be paid to the Holders to be
credited and applied to the amounts due or to become due with respect to the
Notes and all other amounts payable under the Financing Agreements and this
Guaranty, whether matured or unmatured.
(f) To the extent of any payments made under this Guaranty, each Guarantor
making such payment shall have a right of contribution from the other
Guarantors, but such Guarantor covenants and agrees that such right of
contribution shall be subordinate in right of payment to the rights of the
Holders for which full payment has not been made or provided for and, to that
end, such Guarantor agrees not to claim or enforce any such right of
contribution unless and until all of the Notes and all other sums due and
payable under the Financing Agreements have been fully and irrevocably paid and
discharged.
(g) Each Guarantor agrees that to the extent the Obligor or any other
Person makes any payment on any Note, which payment or any part thereof is
subsequently invalidated, voided, declared to be fraudulent or preferential, set
aside, recovered, rescinded or is required to be retained by or repaid to a
trustee, receiver, or any other Person under any bankruptcy code, common law, or
equitable cause, then and to the extent of such payment, the obligation or the
part thereof intended to be satisfied shall be revived and continued in full
force and effect with respect to the Guarantors' obligations hereunder, as if
said payment had not been made. The liability of the Guarantors hereunder shall
not be reduced or discharged, in whole or in part, by any payment to any Holder
from any source that is thereafter paid, returned or refunded in whole or in
part by reason of the assertion of a claim of any kind relating thereto,
including, but not limited to, any claim for breach of contract, breach of
warranty, preference, illegality, invalidity, or fraud asserted by any account
debtor or by any other Person.
(h) No Holder shall be under any obligation: (1) to marshal any assets in
favor of the Guarantors or in payment of any or all of the liabilities of the
Obligor under or in respect of the Notes or the obligations of the Guarantors
hereunder or (2) to pursue any other remedy that the Guarantors may or may not
be able to pursue themselves and that may lighten the Guarantors' burden, any
right to which each Guarantor hereby expressly waives.
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SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE GUARANTORS
Each Guarantor represents and warrants to each Holder that:
(a) Such Guarantor is a corporation or other legal entity duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization, and is duly qualified as a foreign corporation or other legal
entity and is in good standing in each jurisdiction in which such qualification
is required by law, other than those jurisdictions as to which the failure to be
so qualified or in good standing would not, individually or in the aggregate,
reasonably be expected to have a material adverse effect on (1) the business,
operations, affairs, financial condition, assets or properties of the Obligor
and its subsidiaries, taken as a whole, or (2) the ability of such Guarantor to
perform its obligations under this Guaranty, or (3) the validity or
enforceability of this Guaranty (herein in this SECTION 5, a "Material Adverse
Effect"). Such Guarantor has the power and authority to own or hold under lease
the properties it purports to own or hold under lease, to transact the business
it transacts and proposes to transact, to execute and deliver this Guaranty and
to perform the provisions hereof.
(b) This Guaranty has been duly authorized by all necessary action on the
part of such Guarantor, and this Guaranty constitutes a legal, valid and binding
obligation of such Guarantor enforceable against such Guarantor in accordance
with its terms, except as such enforceability may be limited by (1) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and (2) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
(c) The execution, delivery and performance by such Guarantor of this
Guaranty will not (1) contravene, result in any breach of, or constitute a
default under, or result in the creation of any Lien in respect of any property
of such Guarantor or any of its Subsidiaries under any indenture, mortgage, deed
of trust, loan, purchase or credit agreement, lease, charter document or by-law,
or any other agreement or instrument to which such Guarantor or any of its
Subsidiaries is bound or by which such Guarantor or any of its Subsidiaries or
any of their respective properties may be bound or affected, (2) conflict with
or result in a breach of any of the terms, conditions or provisions of any
order, judgment, decree, or ruling of any court, arbitrator or governmental
authority applicable to such Guarantor or any of its Subsidiaries or (3) violate
any provision of any statute or other rule or regulation of any Governmental
Authority applicable to the such Guarantor or any of its Subsidiaries.
(d) No consent, approval or authorization of, or registration, filing or
declaration with, any governmental authority is required in connection with the
execution, delivery or performance by such Guarantor of this Guaranty.
(e) Such Guarantor is solvent, has capital not unreasonably small in
relation to its business or any contemplated or undertaken transaction and has
assets having a value both at fair valuation and at present fair salable value
greater than the amount required to pay its debts as they become due and greater
than the amount that will be required to pay its probable liability on its
existing debts as they become absolute and matured. Such Guarantor does not
intend to incur,
-8-
or believe or should have believed that it will incur, debts beyond its ability
to pay such debts as they become due. Such Guarantor will not be rendered
insolvent by the execution and delivery of, this Guaranty and, on a consolidated
basis with all Obligors, will not be rendered insolvent. Such Guarantor does not
intend to hinder, delay or defraud its creditors by or through the execution and
delivery of, or performance of its obligations under, this Guaranty.
SECTION 6. GUARANTOR COVENANTS.
From and after the date of execution of the First Amendment Agreement by
the Obligor and continuing so long as any amount remains unpaid thereon each
Guarantor agrees to comply with the terms and provisions of Section 5 of the
Note Agreements, insofar as such provisions apply to such Guarantor, as if said
Sections were set forth herein in full.
SECTION 7. GOVERNING LAW
(a) THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF ILLINOIS APPLICABLE THEREIN.
(b) Each Guarantor hereby (i) irrevocably submits and consents to the
jurisdiction of the federal court located in Illinois (or, if such court lacks
jurisdiction, the State courts located therein), and irrevocably agrees that all
actions or proceedings relating to this Guaranty may be litigated in such
courts, and (ii) waives any objection which it may have based on improper venue
or forum non conveniens to the conduct of any proceeding in any such court and
waives personal service of any and all process upon it, and (iii) consents that
all such service of process be made by delivery to it at the address of such
Person set forth in SECTION 11 below. Nothing contained in this section shall
affect the right of any Holder to serve legal process in any other manner
permitted by law or to bring any action or proceeding in the courts of any
jurisdiction against a Guarantor or to enforce a judgment obtained in the courts
of any other jurisdiction.
(c) THE PARTIES HERETO WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN
RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, BETWEEN
THEM ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS GUARANTY, ANY
FINANCING AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR
DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED HERETO. THE PARTIES
HERETO HEREBY AGREE AND CONSENT THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY OF THEM MAY
FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS GUARANTY WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR
RIGHT TO TRIAL BY JURY.
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SECTION 8. AMENDMENTS, WAIVERS AND CONSENTS.
(a) This Guaranty may be amended, and the observance of any term hereof
may be waived (either retroactively or prospectively), with (and only with) the
written consent of each Guarantor and the Holders.
(b) The Guarantors will provide each Holder (irrespective of the amount of
Notes then owned by it) with sufficient information, sufficiently far in advance
of the date a decision is required, to enable such Holder to make an informed
and considered decision with respect to any proposed amendment, waiver or
consent in respect of any of the provisions hereof. The Guarantors will deliver
executed or true and correct copies of each amendment, waiver or consent
effected pursuant to the provisions of this SECTION 8 to each Holder promptly
following the date on which it is executed and delivered by, or receives the
consent or approval of, the Required Holders.
(c) The Obligors will not directly or indirectly pay or cause to be paid
any remuneration, whether by way of fee or otherwise, or grant any security, to
any Holder as consideration for or as an inducement to the entering into by any
Holder of any waiver or amendment of any of the terms and provisions hereof
unless such remuneration is concurrently paid, or security is concurrently
granted, on the same terms, ratably to each Holder even if such Holder did not
consent to such waiver or amendment.
(d) Any amendment or waiver consented to as provided in this SECTION 8
applies equally to all Holders and is binding upon them and upon each future
holder and upon the Guarantors. No such amendment or waiver will extend to or
affect any obligation, covenant or agreement not expressly amended or waived or
impair any right consequent thereon. No course of dealing between the Guarantors
and any Holder nor any delay in exercising any rights hereunder shall operate as
a waiver of any rights of any Holder. As used herein, the term "this Guaranty"
and references thereto shall mean this Guaranty as it may from time to time be
amended or supplemented.
(e) Solely for the purpose of determining whether the Holders of the
requisite percentage of the aggregate principal amount of Notes then outstanding
approved or consented to any amendment, waiver or consent to be given under this
Guaranty, Notes directly or indirectly owned by any Guarantor, the Obligors or
any of their respective subsidiaries or Affiliates shall be deemed not to be
outstanding.
SECTION 9. NOTICES
All notices and communications provided for hereunder shall be in writing
and sent (a) by telefacsimile if the sender on the same day sends a confirming
copy of such notice by a recognized overnight delivery service (charges
prepaid), or (b) by registered or certified mail with return receipt requested
(postage prepaid), or (c) by a recognized overnight delivery service (with
charges prepaid). Any such notice must be sent:
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(1) if to any Holder or such Holder's nominee, to such Holder or
such Holder's nominee at the address specified for such communications in
Schedule I to the Note Agreements, or at such other address as such Holder
or such Holder's nominee shall have specified to any Obligor in writing,
(2) if to any Guarantor, to such Guarantor c/o Cleveland-Cliffs Inc
at its address set forth at the beginning of the Note Agreements to the
attention of Chief Financial Officer, or at such other address as such
Guarantor shall have specified to the Holders in writing.
Notices under this SECTION 9 will be deemed given only when actually received.
SECTION 10. MISCELLANEOUS.
(a) No remedy herein conferred upon or reserved to any Holder is intended
to be exclusive of any other available remedy or remedies, but each and every
such remedy shall be cumulative and shall be in addition to every other remedy
given under this Guaranty now or hereafter existing at law or in equity. No
delay or omission to exercise any right or power accruing upon any default,
omission or failure of performance hereunder shall impair any such right or
power or shall be construed to be a waiver thereof but any such right or power
may be exercised from time to time and as often as may be deemed expedient. In
order to entitle any Holder to exercise any remedy reserved to it under this
Guaranty, it shall not be necessary for such Holder to physically produce its
Note in any proceedings instituted by it or to give any notice, other than such
notice as may be herein expressly required.
(b) The Guarantors will pay all sums becoming due under this Guaranty by
the method and at the address specified in the Note Agreements, or by such other
method or at such other address as any Holder shall have from time to time
specified to the Guarantors in writing for such purpose, without the
presentation or surrender of this Guaranty or any Note.
(c) Any provision of this Guaranty that is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall (to the full extent permitted by law) not invalidate or
render unenforceable such provision in any other jurisdiction.
(d) If the whole or any part of this Guaranty shall be now or hereafter
become unenforceable against any one or more of the Guarantors for any reason
whatsoever or if it is not executed by any one or more of the Guarantors, this
Guaranty shall nevertheless be and remain fully binding upon and enforceable
against each other Guarantor as if it had been made and delivered only by such
other Guarantors.
(e) This Guaranty shall be binding upon each Guarantor and its successors
and assigns and shall inure to the benefit of each Holder and its successors and
assigns so long as its Notes remain outstanding and unpaid.
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(f) This Guaranty may be executed in any number of counterparts, each of
which shall be an original but all of which together shall constitute one
instrument. Each counterpart may consist of a number of copies hereof, each
signed by less than all, but together signed by all, of the parties hereto.
SECTION 11. INDEMNITY.
To the fullest extent of applicable law, each Guarantor shall indemnify
and save each Holder harmless from and against any losses (other than any such
losses created as a result of the gross negligence or willful misconduct of any
Holder) which may arise by virtue of any of the obligations hereby guaranteed
being or becoming for any reason whatsoever in whole or in part void, voidable,
contrary to law, invalid, ineffective or otherwise unenforceable by the Holder
or any of them in accordance with its terms (all of the foregoing collectively,
an "Indemnifiable Circumstance"). For greater certainty, these losses shall
include without limitation all obligations hereby guaranteed which would have
been payable by the Obligor but for the existence of an Indemnifiable
Circumstance; provided, however, that the extent of the Guarantor's aggregate
liability under this SECTION 11 shall not at any time exceed the amount (but for
any Indemnifiable Circumstance) otherwise guaranteed pursuant to SECTION 2.
[Intentionally Blank]
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IN WITNESS WHEREOF, the undersigned has caused this Guaranty to be duly
executed by an authorized representative as of this 15th day of December, 2002.
[SUBSIDIARY GUARANTORS]
BY: ________________________________
Name:
Title:
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SUBSIDIARY GUARANTY SUPPLEMENT
To the Holders of the Notes (as
hereinafter defined)
Ladies and Gentlemen:
CLEVELAND-CLIFFS INC, a Delaware corporation (the "Obligor"), issued
$70,000,000 aggregate principal amount of its 7.00% Senior Notes, due December
15, 2005 pursuant to those certain separate Note Agreements, each dated as of
December 15, 1995 (the "Existing Note Agreements") among the Obligor and each of
the purchasers named on Schedule I thereto (the "Initial Note Purchasers,"
together with their successors, assigns or any other future holder of the Notes,
the "Holders").
The Obligor desires the Holders to enter into that certain First Amendment
Agreement dated as of December 15, 2002 (the Existing Note Agreements, as
amended by the First Amendment Agreement, and as amended from time to time are
hereby referred to as the "Note Agreements"), the Holders required that
________________ enter into a Subsidiary Guaranty Agreement as security for the
Notes (the "Subsidiary Guaranty").
Pursuant to Section 5.21 of the Note Agreements, the Obligor has agreed to
cause the undersigned, _________________, a ___________________ organized under
the laws of ____________________ (the "Additional Guarantor"), to join in the
Subsidiary Guaranty. In accordance with the requirements of the Subsidiary
Guaranty, the Additional Guarantor desires to amend the definition of Guarantor
(as the same may have been heretofore amended) set forth in the Subsidiary
Guaranty attached hereto so that at all times from and after the date hereof,
the Additional Guarantor shall be jointly and severally liable as set forth in
the Subsidiary Guaranty for the obligations of the Obligor under the Financing
Agreements and Notes to the extent and in the manner set forth in the Subsidiary
Guaranty.
The undersigned is the duly elected __________________ of the Additional
Guarantor, a Subsidiary or Affiliate of the Obligor, and is duly authorized to
execute and deliver this Guaranty Supplement to each of you. The execution by
the undersigned of this Guaranty Supplement shall evidence its consent to and
acknowledgment and approval of the terms set forth herein and in the Subsidiary
Guaranty and by such execution the Additional Guarantor shall be deemed to have
made in favor of the Holders the representations and warranties set forth in
Section 5 of the Subsidiary Guaranty.
Upon execution of this Subsidiary Guaranty Supplement, the Subsidiary
Guaranty shall be deemed to be amended as set forth above. Except as amended
herein, the terms and provisions of the Subsidiary Guaranty are hereby ratified,
confirmed and approved in all respects.
EXHIBIT A
(to Subsidiary Guaranty)
Any and all notices, requests, certificates and other instruments
(including the Notes) may refer to the Subsidiary Guaranty without making
specific reference to this Subsidiary Guaranty Supplement, but nevertheless all
such references shall be deemed to include this Subsidiary Guaranty Supplement
unless the context shall otherwise require.
Dated: _________________, _____.
[NAME OF ADDITIONAL GUARANTOR]
By
Its
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