EXHIBIT 10.2a
S&S Draft 3/22/02
SUBSIDIARY GUARANTY
Dated as of March 26, 2002
From
THE GUARANTORS NAMED HEREIN
and
THE ADDITIONAL GUARANTORS REFERRED TO HEREIN
as Guarantors
in favor of
THE SECURED PARTIES REFERRED TO IN
THE CREDIT AGREEMENT REFERRED TO HEREIN
TABLE OF CONTENTS
SECTION PAGE
Section 1. Guaranty; Limitation of Liability.............................................................. 1
Section 2. Guaranty Absolute.............................................................................. 2
Section 3. Waivers and Acknowledgments.................................................................... 3
Section 4. Subrogation.................................................................................... 4
Section 5. Payments Free and Clear of Taxes, Etc.......................................................... 5
Section 6. Representations and Warranties................................................................. 7
Section 7. Covenants...................................................................................... 7
Section 8. Amendments, Guaranty Supplements, Etc.......................................................... 7
Section 9. Notices, Etc................................................................................... 8
Section 10. No Waiver; Remedies........................................................................... 8
Section 11. Right of Set-off.............................................................................. 8
Section 12. Indemnification............................................................................... 9
Section 13. Subordination................................................................................. 9
Section 14. Continuing Guaranty; Assignments under the Credit Agreement................................... 10
Section 15. Effectiveness with respect to IDI............................................................. 10
Section 16. Execution in Counterparts..................................................................... 11
Section 17. Governing Law; Jurisdiction; Waiver of Jury Trial, Etc........................................ 11
Exhibit A - Guaranty Supplement
SUBSIDIARY GUARANTY
SUBSIDIARY GUARANTY dated as of March 26, 2002 made by the Persons
listed on the signature pages hereof under the caption "Subsidiary Guarantors"
and the Additional Guarantors (as defined in Section 8(b)) (such Persons so
listed and the Additional Guarantors being, collectively, the "GUARANTORS" and,
individually, each a "GUARANTOR") in favor of the Secured Parties (as defined in
the Credit Agreement referred to below).
PRELIMINARY STATEMENT.
Steel Dynamics, Inc., an Indiana corporation (the "BORROWER"), is
party to a Credit Agreement dated as of March 26, 2002 (as amended, amended and
restated, supplemented or otherwise modified from time to time, the "CREDIT
AGREEMENT"; the capitalized terms defined therein and not otherwise defined
herein being used herein as therein defined) with certain Lender Parties party
thereto, JPMorgan Chase Bank, as Collateral Agent, JPMorgan Chase Bank, as
Administrative Agent for such Lender Parties, and Xxxxxx Xxxxxxx Senior Funding,
Inc., as Arranger and Syndication Agent. Each Guarantor will derive substantial
direct and indirect benefits from the transactions contemplated by the Credit
Agreement. It is a condition precedent to the making of Advances and the
issuance of Letters of Credit by the Lender Parties under the Credit Agreement
and the entry by the Hedge Banks into Secured Hedge Agreements from time to time
that each Guarantor shall have executed and delivered this Guaranty.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lender Parties to make Advances and to issue Letters of Credit under
the Credit Agreement and the Hedge Banks to enter into Secured Hedge Agreements
from time to time, each Guarantor, jointly and severally with each other
Guarantor, hereby agrees as follows:
Section 1. Guaranty; Limitation of Liability. (a) Each Guarantor
hereby absolutely, unconditionally and irrevocably guarantees the punctual
payment when due, whether at scheduled maturity or on any date of a required
prepayment or by acceleration, demand or otherwise (or which would have become
due but for the operation of any automatic stay in any provision of the
bankruptcy code), of all Obligations of each other Loan Party now or hereafter
existing under or in respect of the Loan Documents (including, without
limitation, any extensions, modifications, substitutions, amendments or renewals
of any or all of the foregoing Obligations), whether direct or indirect,
absolute or contingent, and whether for principal, interest, premiums, fees,
indemnities, contract causes of action, costs, expenses or otherwise (such
Obligations being the "GUARANTEED OBLIGATIONS"), and agrees to pay any and all
expenses (including, without limitation, fees and expenses of counsel) incurred
by the Administrative Agent or any other Secured Party in enforcing any rights
under this Guaranty or any other Loan Document. Without limiting the generality
of the foregoing, each Guarantor's liability shall extend to all amounts that
constitute part of the Guaranteed Obligations and would be owed by any other
Loan Party to any Secured Party under or in respect of the Loan Documents but
for the fact that they are unenforceable or not allowable due to the existence
of a bankruptcy, reorganization or similar proceeding involving such other Loan
Party.
(b) Each Guarantor, and by its acceptance of this Guaranty, the
Administrative Agent and each other Secured Party, hereby confirms that it is
the intention of all
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such Persons that this Guaranty and the Obligations of each Guarantor hereunder
not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy
Law (as hereinafter defined), the Uniform Fraudulent Conveyance Act, the Uniform
Fraudulent Transfer Act or any similar foreign, federal or state law to the
extent applicable to this Guaranty and the Obligations of each Guarantor
hereunder. To effectuate the foregoing intention, the Administrative Agent, the
other Secured Parties and the Guarantors hereby irrevocably agree that the
Obligations of each Guarantor under this Guaranty at any time shall be limited
to the maximum amount as will result in the Obligations of such Guarantor under
this Guaranty not constituting a fraudulent transfer or conveyance. For purposes
hereof, "BANKRUPTCY LAW" means any proceeding of the type referred to in Section
6.01(f) of the Credit Agreement or Title 11, U.S. Code, or any similar foreign,
federal or state law for the relief of debtors.
(c) Each Guarantor hereby unconditionally and irrevocably agrees
that in the event any payment shall be required to be made to any Secured Party
under this Guaranty or any other guaranty, such Guarantor will contribute, to
the maximum extent permitted by law, such amounts to each other Guarantor and
each other guarantor so as to maximize the aggregate amount paid to the Secured
Parties under or in respect of the Loan Documents.
Section 2. Guaranty Absolute. Each Guarantor guarantees that the
Guaranteed Obligations will be paid strictly in accordance with the terms of the
Loan Documents, regardless of any law, regulation or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the rights of any
Secured Party with respect thereto. The Obligations of each Guarantor under or
in respect of this Guaranty are independent of the Guaranteed Obligations or any
other Obligations of any other Loan Party under or in respect of the Loan
Documents, and a separate action or actions may be brought and prosecuted
against each Guarantor to enforce this Guaranty, irrespective of whether any
action is brought against the Borrower or any other Loan Party or whether the
Borrower or any other Loan Party is joined in any such action or actions. The
liability of each Guarantor under this Guaranty shall be irrevocable, absolute
and unconditional irrespective of, and each Guarantor hereby irrevocably waives
any defenses it may now have or hereafter acquire in any way relating to, any or
all of the following:
(a) any lack of validity or enforceability of any Loan Document or
any agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Guaranteed Obligations or any other
Obligations of any other Loan Party under or in respect of the Loan
Documents, or any other amendment or waiver of or any consent to departure
from any Loan Document, including, without limitation, any increase in the
Guaranteed Obligations resulting from the extension of additional credit
to any Loan Party or any of its Subsidiaries or otherwise;
(c) any taking, exchange, release or non-perfection of any
Collateral or any other collateral, or any taking, release or amendment or
waiver of, or consent to departure from, any other guaranty, for all or
any of the Guaranteed Obligations;
(d) any manner of application of Collateral or any other collateral,
or proceeds thereof, to all or any of the Guaranteed Obligations, or any
manner of sale or other
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disposition of any Collateral or any other collateral for all or any of
the Guaranteed Obligations or any other Obligations of any Loan Party
under the Loan Documents or any other assets of any Loan Party or any of
its Subsidiaries;
(e) any change, restructuring or termination of the corporate
structure or existence of any Loan Party or any of its Subsidiaries;
(f) any failure of any Secured Party to disclose to any Loan Party
any information relating to the business, condition (financial or
otherwise), operations, performance, properties or prospects of any other
Loan Party now or hereafter known to such Secured Party (each Guarantor
waiving any duty on the part of the Secured Parties to disclose such
information);
(g) the failure of any other Person to execute or deliver this
Guaranty, any Guaranty Supplement (as hereinafter defined) or any other
guaranty or agreement or the release or reduction of liability of any
Guarantor or other guarantor or surety with respect to the Guaranteed
Obligations; or
(h) any other circumstance (including, without limitation, any
statute of limitations) or any existence of or reliance on any
representation by any Secured Party that might otherwise constitute a
defense available to, or a discharge of, any Loan Party or any other
guarantor or surety.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by any Secured Party or any other Person upon the
insolvency, bankruptcy or reorganization of the Borrower or any other Loan Party
or otherwise, all as though such payment had been due but not made at such time.
Section 3. Waivers and Acknowledgments. (a) Each Guarantor hereby
unconditionally and irrevocably waives promptness, diligence, notice of
acceptance, presentment, demand for performance, notice of nonperformance,
default, acceleration, protest or dishonor and any other notice with respect to
any of the Guaranteed Obligations and this Guaranty and any requirement that any
Secured Party protect, secure, perfect or insure any Lien or any property
subject thereto or exhaust any right or take any action against any Loan Party
or any other Person or any Collateral.
(b) Each Guarantor hereby unconditionally and irrevocably waives any
right to revoke this Guaranty and acknowledges that this Guaranty is continuing
in nature and applies to all Guaranteed Obligations, whether existing now or in
the future.
(c) Each Guarantor hereby unconditionally and irrevocably waives (i)
any defense arising by reason of any claim or defense based upon an election of
remedies by any Secured Party that in any manner impairs, reduces, releases or
otherwise adversely affects the subrogation, reimbursement, exoneration,
contribution or indemnification rights of such Guarantor or other rights of such
Guarantor to proceed against any of the other Loan Parties, any other guarantor
or any other Person or any Collateral and (ii) any defense based on any right of
set-off or counterclaim against or in respect of the Obligations of such
Guarantor hereunder.
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(d) Each Guarantor acknowledges that the Collateral Agent may,
without notice to or demand upon such Guarantor and without affecting the
liability of such Guarantor under this Guaranty, foreclose under any mortgage by
nonjudicial sale, and each Guarantor hereby waives any defense to the recovery
by the Collateral Agent and the other Secured Parties against such Guarantor of
any deficiency after such nonjudicial sale and any defense or benefits that may
be afforded by applicable law.
(e) Each Guarantor hereby unconditionally and irrevocably waives any
duty on the part of any Secured Party to disclose to such Guarantor any matter,
fact or thing relating to the business, condition (financial or otherwise),
operations, performance, properties or prospects of any other Loan Party or any
of its Subsidiaries now or hereafter known by such Secured Party.
(f) Each Guarantor acknowledges that it will receive substantial
direct and indirect benefits from the financing arrangements contemplated by the
Loan Documents and that the waivers set forth in Section 2 and this Section 3
are knowingly made in contemplation of such benefits.
Section 4. Subrogation. Each Guarantor hereby unconditionally and
irrevocably agrees not to exercise any rights that it may now have or hereafter
acquire against the Borrower, any other Loan Party or any other insider
guarantor that arise from the existence, payment, performance or enforcement of
such Guarantor's Obligations under or in respect of this Guaranty or any other
Loan Document, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of any Secured Party against the Borrower,
any other Loan Party or any other insider guarantor or any Collateral, whether
or not such claim, remedy or right arises in equity or under contract, statute
or common law, including, without limitation, the right to take or receive from
the Borrower, any other Loan Party or any other insider guarantor, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security on account of such claim, remedy or right, unless and until
all of the Guaranteed Obligations and all other amounts payable under this
Guaranty shall have been paid in full in cash, all Letters of Credit and all
Secured Hedge Agreements shall have expired or been terminated and the
Commitments shall have expired or been terminated. If any amount shall be paid
to any Guarantor in violation of the immediately preceding sentence at any time
prior to the latest of (a) the payment in full in cash of the Guaranteed
Obligations and all other amounts payable under this Guaranty, (b) the
Termination Date and (c) the latest date of expiration or termination of all
Letters of Credit and all Secured Hedge Agreements, such amount shall be
received and held in trust for the benefit of the Secured Parties, shall be
segregated from other property and funds of such Guarantor and shall forthwith
be paid or delivered to the Administrative Agent in the same form as so received
(with any necessary endorsement or assignment) to be credited and applied to the
Guaranteed Obligations and all other amounts payable under this Guaranty,
whether matured or unmatured, in accordance with the terms of the Loan
Documents, or to be held as Collateral for any Guaranteed Obligations or other
amounts payable under this Guaranty thereafter arising. If (i) any Guarantor
shall make payment to any Secured Party of all or any part of the Guaranteed
Obligations, (ii) all of the Guaranteed Obligations and all other amounts
payable under this Guaranty shall have been paid in full in cash, (iii) the
Termination Date shall have occurred and (iv) all Letters of Credit and all
Secured Hedge Agreements shall have expired or been
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terminated, the Secured Parties will, at such Guarantor's request and expense,
execute and deliver to such Guarantor appropriate documents, without recourse
and without representation or warranty, necessary to evidence the transfer by
subrogation to such Guarantor of an interest in the Guaranteed Obligations
resulting from such payment made by such Guarantor pursuant to this Guaranty.
Section 5. Payments Free and Clear of Taxes, Etc. (a) Any and all
payments made by any Guarantor to or for the account of any Secured Party under
or in respect of this Guaranty or any other Loan Document shall be made, in
accordance with Section 2.12 of the Credit Agreement, free and clear of and
without deduction for any and all present or future Taxes. If any Guarantor
shall be required by law to deduct any Taxes from or in respect of any sum
payable under or in respect of this Guaranty or any other Loan Document to any
Secured Party, (i) the sum payable by such Guarantor shall be increased as may
be necessary so that after such Guarantor and the Administrative Agent have made
all required deductions (including deductions applicable to additional sums
payable under this Section 5), such Secured Party receives an amount equal to
the sum it would have received had no such deductions been made, (ii) such
Guarantor shall make all such deductions and (iii) such Guarantor shall pay the
full amount deducted to the relevant taxation authority or other authority in
accordance with applicable law.
(b) In addition, each Guarantor agrees to pay any present or future
Other Taxes that arise from any payment made by or on behalf of such Guarantor
under or in respect of this Guaranty or any other Loan Document or from the
execution, delivery or registration of, performance under, or otherwise with
respect to, this Guaranty and the other Loan Documents.
(c) Each Guarantor will indemnify each Secured Party for and hold it
harmless against the full amount of Taxes and Other Taxes, and for the full
amount of taxes of any kind imposed by any jurisdiction on amounts payable under
this Section 5, imposed on or paid by such Secured Party and any liability
(including penalties, additions to tax, interest and expenses) arising therefrom
or with respect thereto. This indemnification shall be made within 30 days from
the date such Secured Party makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes by or on
behalf of any Guarantor, such Guarantor shall furnish to the Administrative
Agent, at its address referred to in Section 9, the original or a certified copy
of a receipt evidencing such payment, to the extent such a receipt is issued
therefor or other written proof of payment thereof that is reasonable
satisfactory to the Administrative Agent. In the case of any payment hereunder
by or on behalf of any Guarantor through an account or branch outside the United
States or by or on behalf of such Guarantor by a payor that is not a United
States person, if such Guarantor determines that no Taxes are payable in respect
thereof, such Guarantor shall furnish, or shall cause such payor to furnish, to
the Administrative Agent, at such address, an opinion of counsel acceptable to
the Administrative Agent stating that such payment is exempt from Taxes. For
purposes of subsections (d) and (e) of this Section 5, the terms "UNITED STATES"
and "UNITED STATES PERSON" shall have the meanings specified in Section 7701 of
the Internal Revenue Code.
(e) Each Secured Party organized under the laws of a jurisdiction
outside the United States shall, on or prior to the date of its execution and
delivery of the Credit Agreement
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in the case of each Initial Lender or Initial Issuing Bank, as the case may be,
and on or prior to the date of the Assignment and Acceptance or Secured Hedge
Agreement pursuant to which it becomes a Secured Party in the case of each other
Secured Party, and from time to time thereafter as reasonably requested in
writing by any Guarantor (but only so long thereafter as such Secured Party
remains lawfully able to do so), provide each of the Administrative Agent and
the Borrower as agent for such Guarantor with two original Internal Revenue
Service Form W-8ECI (or successor form), as appropriate, or (in the case of a
Secured Party that is claiming a reduced rate of United States withholding tax
because of a tax treaty or has certified in writing to the Administrative Agent
that it is not (i) a "bank" as defined in Section 881(c)(3)(A) of the Internal
Revenue Code), (ii) is not a 10-percent shareholder (within the meaning of
Section 871(h)(3)(B) of the Internal Revenue Code) of the Borrower or (iii) a
controlled foreign corporation related to the Borrower (within the meaning of
Section 864(d)(4) of the Internal Revenue Code), Internal Revenue Service Form
W-8BEN or any successor or other form prescribed by the Internal Revenue
Service, certifying that such Secured Party is exempt from or entitled to a
reduced rate of United States withholding tax on payments under the Credit
Agreement or the Notes or, in the case of a Secured Party that has certified
that it is not a "bank" as described above, certifying that such Secured Party
is a foreign corporation, partnership, estate or trust. If the forms provided by
a Secured Party at the time such Secured Party first becomes a party to the
Credit Agreement or the applicable Secured Hedge Agreement indicate a United
States interest withholding tax rate in excess of zero, withholding tax at such
rate shall be considered excluded from Taxes unless and until such Secured Party
provides the appropriate form certifying that a lesser rate applies, whereupon
withholding tax at such lesser rate only shall be considered excluded from Taxes
for periods governed by such forms; provided, however, that if, in the case of a
Secured Party becoming a party to the Credit Agreement, at the date of the
Assignment and Acceptance pursuant to which a Secured Party becomes a party to
the Credit Agreement, the Secured Party assignor was entitled to payments under
subsection (a) of this Section 5 in respect of United States withholding tax
with respect to interest paid at such date, then, to such extent, the term Taxes
shall include (in addition to withholding taxes that may be imposed in the
future or other amounts otherwise includable in Taxes) United States withholding
tax, if any, applicable with respect to the Secured Party assignee on such date.
If any form or document referred to in this subsection (e) and requested by any
Guarantor pursuant to this subsection (e) requires the disclosure of
information, other than information necessary to compute the tax payable and
information required on the date hereof by Internal Revenue Service Forms W-8BEN
or W-8ECI or the related certificate described above, that the applicable
Secured Party reasonably considers to be confidential, such Secured Party shall
give notice thereof to the applicable Guarantor and shall not be obligated to
include in such form or document such confidential information.
(f) For any period with respect to which a Secured Party has failed
to provide any Guarantor with the appropriate form, certificate or other
document described in subsection (e) above (other than if such failure is due to
a change in law, or in the interpretation or application thereof, occurring
after the date on which a form, certificate or other document originally was
required to be provided or if such form, certificate or other document otherwise
is not required under subsection (e) above), such Secured Party shall not be
entitled to indemnification under subsection (a) or (c) of this Section 5 with
respect to Taxes imposed by the United States by reason of such failure;
provided, however, that should a Secured Party become subject to Taxes because
of its failure to deliver a form, certificate or other document
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required hereunder, such Guarantor shall take such steps as such Secured Party
shall reasonably request to assist such Secured Party to recover such Taxes.
(g) Any Secured Party claiming any additional amounts payable
pursuant to this Section 5 agrees to use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Applicable Lending Office if the making of such a change
would avoid the need for, or reduce the amount of, any such additional amounts
that may thereafter accrue and would not, in the reasonable judgment of such
Secured Party, be otherwise disadvantageous to such Secured Party.
Section 6. Representations and Warranties. Each Guarantor hereby
makes each representation and warranty made in the Loan Documents by the
Borrower with respect to such Guarantor and each Guarantor hereby further
represents and warrants as follows:
(a) There are no conditions precedent to the effectiveness of this
Guaranty that have not been satisfied or waived.
(b) Such Guarantor has, independently and without reliance upon any
Secured Party and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Guaranty and each other Loan Document to which it is or is to be a party,
and such Guarantor has established adequate means of obtaining from each
other Loan Party on a continuing basis information pertaining to, and is
now and on a continuing basis will be completely familiar with, the
business, condition (financial or otherwise), operations, performance,
properties and prospects of such other Loan Party.
Section 7. Covenants. Each Guarantor covenants and agrees that, so
long as any part of the Guaranteed Obligations shall remain unpaid, any Letter
of Credit shall be outstanding, any Lender Party shall have any Commitment or
any Secured Hedge Agreement shall be in effect, such Guarantor will perform and
observe, and cause each of its Subsidiaries to perform and observe, all of the
terms, covenants and agreements set forth in the Loan Documents on its or their
part to be performed or observed or that the Borrower has agreed to cause such
Guarantor or such Subsidiaries to perform or observe.
Section 8. Amendments, Guaranty Supplements, Etc. (a) No amendment
or waiver of any provision of this Guaranty and no consent to any departure by
any Guarantor therefrom shall in any event be effective unless the same shall be
in writing and signed by the Administrative Agent and the Required Lenders, and
then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given; provided, however, that no amendment,
waiver or consent shall, unless in writing and signed by all of the Lender
Parties (other than any Lender Party that is, at such time, a Defaulting
Lender), except as otherwise expressly set forth in Section 8.01 of the Credit
Agreement, reduce or limit the obligations of any Guarantor hereunder, release
any Guarantor hereunder or otherwise limit any Guarantor's liability with
respect to the Obligations owing to the Secured Parties under or in respect of
the Loan Documents.
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(b) Upon the execution and delivery by any Person of a guaranty
supplement in substantially the form of Exhibit A hereto (each, a "GUARANTY
SUPPLEMENT"), (i) such Person shall be referred to as an "ADDITIONAL GUARANTOR"
and shall become and be a Guarantor hereunder, and each reference in this
Guaranty to a "GUARANTOR" shall also mean and be a reference to such Additional
Guarantor, and each reference in any other Loan Document to a "SUBSIDIARY
GUARANTOR" shall also mean and be a reference to such Additional Guarantor, and
(ii) each reference herein to "THIS GUARANTY", "HEREUNDER", "HEREOF" or words of
like import referring to this Guaranty, and each reference in any other Loan
Document to the "SUBSIDIARY GUARANTY", "THEREUNDER", "THEREOF" or words of like
import referring to this Guaranty, shall mean and be a reference to this
Guaranty as supplemented by such Guaranty Supplement.
Section 9. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telecopy or
telex communication) and mailed, telegraphed, telecopied, telexed or delivered
to it, if to any Guarantor, addressed to it in care of the Borrower at the
Borrower's address specified pursuant to Section 8.02 of the Credit Agreement,
if to any Agent or any Lender Party, at its address specified pursuant to
Section 8.02 of the Credit Agreement, if to any Hedge Bank, at its address
specified in the Secured Hedge Agreement to which it is a party, or, as to any
party, at such other address as shall be designated by such party in a written
notice to each other party. All such notices and other communications shall,
when mailed, telegraphed, telecopied or telexed, be effective when deposited in
the mails, delivered to the telegraph company, transmitted by telecopier or
confirmed by telex answerback, respectively. Delivery by telecopier of an
executed counterpart of a signature page to any amendment or waiver of any
provision of this Guaranty or of any Guaranty Supplement to be executed and
delivered hereunder shall be effective as delivery of an original executed
counterpart thereof.
Section 10. No Waiver; Remedies. No failure on the part of any
Secured Party to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
Section 11. Right of Set-off. Upon (a) the occurrence and during the
continuance of any Event of Default and (b) the making of the request or the
granting of the consent specified by Section 6.01 of the Credit Agreement to
authorize the Administrative Agent to declare the Notes due and payable pursuant
to the provisions of said Section 6.01, each Agent and each Lender Party and
each of their respective Affiliates is hereby authorized at any time and from
time to time, to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other indebtedness at any time owing by such Agent, such
Lender Party or such Affiliate to or for the credit or the account of any
Guarantor against any and all of the Obligations of such Guarantor now or
hereafter existing under the Loan Documents, irrespective of whether such Agent
or such Lender Party shall have made any demand under this Guaranty or any other
Loan Document and although such Obligations may be unmatured. Each Agent and
each Lender Party agrees promptly to notify such Guarantor after any such
set-off and application; provided, however, that the failure to give such notice
shall not affect the validity of such set-off and application. The rights of
each Agent and each Lender Party and their respective Affiliates under this
Section are
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in addition to other rights and remedies (including, without
limitation, other rights of set-off) that such Agent, such Lender Party and
their respective Affiliates may have.
Section 12. Indemnification. (a) Without limitation on any other
Obligations of any Guarantor or remedies of the Secured Parties under this
Guaranty, each Guarantor shall, to the fullest extent permitted by law,
indemnify, defend and save and hold harmless each Secured Party and each of
their Affiliates and their respective officers, directors, employees, agents and
advisors (each, an "INDEMNIFIED PARTY") from and against, and shall pay on
demand, any and all claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable fees and expenses of counsel) that
may be incurred by or asserted or awarded against any Indemnified Party in
connection with or as a result of any failure of any Guaranteed Obligations to
be the legal, valid and binding obligations of any Loan Party enforceable
against such Loan Party in accordance with their terms.
(b) Each Guarantor hereby also agrees that none of the Indemnified
Parties shall have any liability (whether direct or indirect, in contract, tort
or otherwise) to any of the Guarantors or any of their respective Affiliates or
any of their respective officers, directors, employees, agents and advisors, and
each Guarantor hereby agrees not to assert any claim against any Indemnified
Party on any theory of liability, for special, indirect, consequential or
punitive damages arising out of or otherwise relating to the Facilities, the
actual or proposed use of the proceeds of the Advances or the Letters of Credit,
the Transaction Documents or any of the transactions contemplated by the
Transaction Documents.
(c) Without prejudice to the survival of any of the other agreements
of any Guarantor under this Guaranty or any of the other Loan Documents, the
agreements and obligations of each Guarantor contained in Section 1(a) (with
respect to enforcement expenses), the last sentence of Section 2, Section 5 and
this Section 12 shall survive the payment in full of the Guaranteed Obligations
and all of the other amounts payable under this Guaranty.
Section 13. Subordination. Each Guarantor hereby subordinates any
and all debts, liabilities and other Obligations owed to such Guarantor by each
other Loan Party (the "SUBORDINATED OBLIGATIONS") to the Guaranteed Obligations
to the extent and in the manner hereinafter set forth in this Section 13:
(a) Prohibited Payments, Etc. Except during the continuance of a
Default (including the commencement and continuation of any proceeding
under any Bankruptcy Law relating to any other Loan Party), each Guarantor
may receive regularly scheduled payments from any other Loan Party on
account of the Subordinated Obligations. After the occurrence and during
the continuance of any Default (including the commencement and
continuation of any proceeding under any Bankruptcy Law relating to any
other Loan Party), however, unless the Administrative Agent otherwise
agrees, no Guarantor shall demand, accept or take any action to collect
any payment on account of the Subordinated Obligations.
(b) Prior Payment of Guaranteed Obligations. In any proceeding under
any Bankruptcy Law relating to any other Loan Party, each Guarantor agrees
that the Secured Parties shall be entitled to receive payment in full in
cash of all Guaranteed Obligations
10
(including all interest and expenses accruing after the commencement of a
proceeding under any Bankruptcy Law, whether or not constituting an
allowed claim in such proceeding ("POST PETITION INTEREST")) before such
Guarantor receives payment of any Subordinated Obligations.
(c) Turn-Over. After the occurrence and during the continuance of
any Default (including the commencement and continuation of any proceeding
under any Bankruptcy Law relating to any other Loan Party), each Guarantor
shall, if the Administrative Agent so requests, collect, enforce and
receive payments on account of the Subordinated Obligations as trustee for
the Secured Parties and deliver such payments to the Administrative Agent
on account of the Guaranteed Obligations (including all Post Petition
Interest), together with any necessary endorsements or other instruments
of transfer, but without reducing or affecting in any manner the liability
of such Guarantor under the other provisions of this Guaranty.
(d) Administrative Agent Authorization. After the occurrence and
during the continuance of any Default (including the commencement and
continuation of any proceeding under any Bankruptcy Law relating to any
other Loan Party), the Administrative Agent is authorized and empowered
(but without any obligation to so do), in its discretion, (i) in the name
of each Guarantor, to collect and enforce, and to submit claims in respect
of, Subordinated Obligations and to apply any amounts received thereon to
the Guaranteed Obligations (including any and all Post Petition Interest),
and (ii) to require each Guarantor (A) to collect and enforce, and to
submit claims in respect of, Subordinated Obligations and (B) to pay any
amounts received on such obligations to the Administrative Agent for
application to the Guaranteed Obligations (including any and all Post
Petition Interest).
Section 14. Continuing Guaranty; Assignments under the Credit
Agreement. This Guaranty is a continuing guaranty and shall (a) remain in full
force and effect until the latest of (i) the payment in full in cash of the
Guaranteed Obligations and all other amounts payable under this Guaranty, (ii)
the Termination Date and (iii) the latest date of expiration or termination of
all Letters of Credit and all Secured Hedge Agreements, (b) be binding upon the
Guarantor, its successors and assigns and (c) inure to the benefit of and be
enforceable by the Secured Parties and their successors, transferees and
assigns. Without limiting the generality of clause (c) of the immediately
preceding sentence, any Secured Party may assign or otherwise transfer all or
any portion of its rights and obligations under the Credit Agreement (including,
without limitation, all or any portion of its Commitments, the Advances owing to
it and the Note or Notes held by it) to any other Person, and such other Person
shall thereupon become vested with all the benefits in respect thereof granted
to such Secured Party herein or otherwise, in each case as and to the extent
provided in Section 8.07 of the Credit Agreement. No Guarantor shall have the
right to assign its rights hereunder or any interest herein without the prior
written consent of the Secured Parties.
Section 15. Effectiveness with respect to IDI. This Agreement shall
become effective with respect to Iron Dynamics, Inc. on the date on which the
conditions set forth in the second paragraph of Section 6 of the IDI Settlement
Agreement are fulfilled.
11
Section 16. Execution in Counterparts. This Guaranty and each
amendment, waiver and consent with respect hereto may be executed in any number
of counterparts and by different parties thereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of a signature page to this Guaranty by telecopier shall be
effective as delivery of an original executed counterpart of this Guaranty.
Section 17. Governing Law; Jurisdiction; Waiver of Jury Trial, Etc.
(a) THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.
(b) Each Guarantor hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of any New York
State court or federal court of the United States of America sitting in New York
City, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Guaranty or any of the other Loan Documents
to which it is or is to be a party, or for recognition or enforcement of any
judgment, and each Guarantor hereby irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be heard and
determined in any such New York State court or, to the extent permitted by law,
in such federal court. Each Guarantor hereby agrees that service of process in
any such action or proceeding brought in any such New York state court or in
such federal court may be made upon CT Corporation System at its offices at 000
Xxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "PROCESS AGENT") and
each Guarantor hereby irrevocably appoints the Process Agent its authorized
agent to accept such service of process, and agrees that the failure of the
Process Agent to give any notice of any such service shall not impair or affect
the validity of such service or of any judgment rendered in any action or
proceeding based thereon. Each Guarantor hereby further irrevocably consents to
the service of process in any action or proceeding in such courts by the mailing
thereof by any parties hereto by registered or certified mail, postage prepaid,
to such Guarantor at its address specified pursuant to Section 9. Each Guarantor
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Guaranty or any other Loan
Document shall affect any right that any party may otherwise have to bring any
action or proceeding relating to this Guaranty or any other Loan Document in the
courts of any jurisdiction.
(c) Each Guarantor irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection that it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Guaranty or any of the other Loan Documents
to which it is or is to be a party in any New York State or federal court. Each
Guarantor hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such suit, action or
proceeding in any such court.
(d) EACH GUARANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT
OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS, THE
ADVANCES OR THE ACTIONS
12
OF ANY SECURED PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR
ENFORCEMENT THEREOF.
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.
SDI INVESTMENT COMPANY
By
---------------------------------------
Title:
IRON DYNAMICS, INC.
By
---------------------------------------
Title:
Etc.
EXHIBIT A
TO THE
SUBSIDIARY GUARANTY
FORM OF SUBSIDIARY GUARANTY SUPPLEMENT
--------- --, ----
JPMorgan Chase Bank, as Administrative Agent
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxx
Credit Agreement dated as of March 26, 2002 among
Steel Dynamics, Inc, an Indiana corporation (the "BORROWER"),
the Lender Parties party to the Credit Agreement, JPMorgan Chase Bank,
as Collateral Agent, JPMorgan Chase Bank, as Administrative Agent,
and Xxxxxx Xxxxxxx Senior Funding, Inc., as Arranger and Syndication Agent
Ladies and Gentlemen:
Reference is made to the above-captioned Credit Agreement and to the
Subsidiary Guaranty referred to therein (such Subsidiary Guaranty, as in effect
on the date hereof and as it may hereafter be amended, supplemented or otherwise
modified from time to time, together with this Guaranty Supplement, being the
"SUBSIDIARY GUARANTY"). The capitalized terms defined in the Subsidiary Guaranty
or in the Credit Agreement and not otherwise defined herein are used herein as
therein defined.
Section 1. Guaranty; Limitation of Liability. (a) The undersigned
hereby absolutely, unconditionally and irrevocably guarantees the punctual
payment when due, whether at scheduled maturity or on any date of a required
prepayment or by acceleration, demand or otherwise, of all Obligations of each
other Loan Party now or hereafter existing under or in respect of the Loan
Documents (including, without limitation, any extensions, modifications,
substitutions, amendments or renewals of any or all of the foregoing
Obligations), whether direct or indirect, absolute or contingent, and whether
for principal, interest, premium, fees, indemnities, contract causes of action,
costs, expenses or otherwise (such Obligations being the "GUARANTEED
OBLIGATIONS"), and agrees to pay any and all expenses (including, without
limitation, fees and expenses of counsel) incurred by the Administrative Agent
or any other Secured Party in enforcing any rights under this Guaranty
Supplement, the Subsidiary Guaranty or any other Loan Document. Without limiting
the generality of the foregoing, the undersigned's liability shall extend to all
amounts that constitute part of the Guaranteed Obligations and would be owed by
any other Loan Party to any Secured Party under or in respect of the Loan
Documents but for the fact that they are unenforceable or not allowable due to
the existence of a bankruptcy, reorganization or similar proceeding involving
such other Loan Party.
2
(b) The undersigned, and by its acceptance of this Guaranty
Supplement, the Administrative Agent and each other Secured Party, hereby
confirms that it is the intention of all such Persons that this Guaranty
Supplement, the Subsidiary Guaranty and the Obligations of the undersigned
hereunder and thereunder not constitute a fraudulent transfer or conveyance for
purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform
Fraudulent Transfer Act or any similar foreign, federal or state law to the
extent applicable to this Guaranty Supplement, the Subsidiary Guaranty and the
Obligations of the undersigned hereunder and thereunder. To effectuate the
foregoing intention, the Administrative Agent, the other Secured Parties and the
undersigned hereby irrevocably agree that the Obligations of the undersigned
under this Guaranty Supplement and the Subsidiary Guaranty at any time shall be
limited to the maximum amount as will result in the Obligations of the
undersigned under this Guaranty Supplement and the Subsidiary Guaranty not
constituting a fraudulent transfer or conveyance.
(c) The undersigned hereby unconditionally and irrevocably agrees
that in the event any payment shall be required to be made to any Secured Party
under this Guaranty Supplement, the Subsidiary Guaranty or any other guaranty,
the undersigned will contribute, to the maximum extent permitted by applicable
law, such amounts to each other Guarantor and each other guarantor so as to
maximize the aggregate amount paid to the Secured Parties under or in respect of
the Loan Documents.
Section 2. Obligations Under the Guaranty. The undersigned hereby
agrees, as of the date first above written, to be bound as a Guarantor by all of
the terms and conditions of the Subsidiary Guaranty to the same extent as each
of the other Guarantors thereunder. The undersigned further agrees, as of the
date first above written, that each reference in the Subsidiary Guaranty to an
"ADDITIONAL GUARANTOR" or a "GUARANTOR" shall also mean and be a reference to
the undersigned, and each reference in any other Loan Document to a "SUBSIDIARY
GUARANTOR" or a "LOAN PARTY" shall also mean and be a reference to the
undersigned.
Section 3. Representations and Warranties. The undersigned hereby
makes each representation and warranty set forth in Section 6 of the Subsidiary
Guaranty to the same extent as each other Guarantor.
Section 4. Delivery by Telecopier. Delivery of an executed
counterpart of a signature page to this Guaranty Supplement by telecopier shall
be effective as delivery of an original executed counterpart of this Guaranty
Supplement.
Section 5. Governing Law; Jurisdiction; Waiver of Jury Trial, Etc.
(a) THIS GUARANTY SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
(b) The undersigned hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of any New York
State court or any federal court of the United States of America sitting in New
York City, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Guaranty Supplement, the Subsidiary Guaranty
or any of the other Loan Documents to which it is or is to be a party, or for
recognition or enforcement of any judgment, and the undersigned hereby
irrevocably and unconditionally agrees that all claims in respect of any such
action or proceeding may be heard
3
and determined in any such New York State court or, to the extent permitted by
law, in such federal court. The undersigned hereby agrees that service of
process in any such action or proceeding brought in any such New York state
court or in such federal court may be made upon CT Corporation System at its
offices at 000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "PROCESS
AGENT") and the undersigned hereby irrevocably appoints the Process Agent its
authorized agent to accept such service of process, and agrees that the failure
of the Process Agent to give any notice of any such service shall not impair or
affect the validity of such service or of any judgment rendered in any action or
proceeding based thereon. The undersigned hereby further irrevocably consents to
the service of process in any action or proceeding in such courts by the mailing
thereof by any parties hereto by registered or certified mail, postage prepaid,
to the undersigned at its address specified pursuant to Section 9 of the
Subsidiary Guaranty. The undersigned agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Guaranty Supplement or the Subsidiary Guaranty or any other Loan
Document shall affect any right that any party may otherwise have to bring any
action or proceeding relating to this Guaranty Supplement, the Subsidiary
Guaranty or any of the other Loan Documents to which it is or is to be a party
in the courts of any other jurisdiction.
(c) The undersigned irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection that it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Guaranty Supplement, the Subsidiary Guaranty
or any of the other Loan Documents to which it is or is to be a party in any New
York State or federal court. The undersigned hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such suit, action or proceeding in any such court.
(d) THE UNDERSIGNED HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT
OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS, THE
ADVANCES OR THE ACTIONS OF ANY SECURED PARTY IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT THEREOF.
Very truly yours,
[NAME OF ADDITIONAL GUARANTOR]
By
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Title:
