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EXHIBIT 10.1
GUARANTY
THIS GUARANTY is dated as of January 7, 1997, by XXXXXX X. XXXXXX
("Xxxxxx"), T. XXXXXXXX XXXXXXXX ("Xxxxxxxx"), XXXXXX XXXXXXXXX ("X.
Xxxxxxxxx"), XXXXXX XXXXXXXXXX ("Xxxxxxxxxx"), XXXXXX XXXXXXXXX ("X. Xxxxxxxxx")
and XXXXXXX XXXX ("Xxxx") (Jacobs, Jennings, D. Moorehead, Rubenstein, X.
Xxxxxxxxx and Zack are hereinafter referred to individually as a "Guarantor")
and collectively as the "Guarantors") to and for the benefit of LASALLE NATIONAL
BANK, a national banking association ("Lender").
RECITALS:
A. Pursuant to the terms and conditions of a certain Loan Agreement of
even date herewith (the "Loan Agreement") by and among HouTex, Lender and Metal
Management, Inc., a Delaware corporation ("MMI"), Lender has agreed, among other
things, to loan to MMI the principal amount of $6,500,000 (the "Loan").
B. A condition precedent to Lender's extension of the Loan to MMI is
the execution and delivery of (i) this Guaranty, (ii) that certain Note of even
date herewith (the "Note") made by MMI and payable to the order of Lender to
evidence the Loan, and (iii) the other Loan Documents (as defined in the Loan
Agreement). All capitalized terms used herein which are not otherwise defined
shall have the meanings ascribed thereto in the Loan Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, each Guarantor hereby agrees as
follows:
1. GUARANTY OF PAYMENT. Each Guarantor hereby unconditionally and
irrevocably guaranties to Lender the punctual payment and performance when due,
whether at stated maturity or by acceleration or otherwise, of the indebtedness
and other obligations of MMI to Lender evidenced by the Note and any other
obligations or amounts that may become owing by MMI under the Loan Documents
(such indebtedness, obligations and other amounts are hereinafter referred to as
"MMI's Obligations"). Each Guarantor agrees that this Guaranty is a present and
continuing guaranty of payment and not of collectibility, and that Lender shall
not be required to prosecute collection, enforcement or other remedies against
MMI or any other guarantor of MMI's Obligations, or to enforce or resort to any
collateral for the repayment of MMI's Obligations or other rights or remedies
pertaining thereto, before calling on such Guarantor for payment. Each Guarantor
agrees that if for any reason MMI shall fail or be unable to pay, punctually and
fully, any of MMI's Obligations, such Guarantor shall pay such obligations to
Lender in full immediately upon demand. Each Guarantor agrees that one or more
successive actions may be brought against such Guarantor, as often as Lender
deems advisable, until all of MMI's Obligations are paid and performed in full.
2. REPRESENTATIONS AND WARRANTIES. The following shall constitute
representations and warranties of each Guarantor and each Guarantor hereby
acknowledges that Lender intends to make the Loan in reliance thereon:
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(a) Such Guarantor is not in default and no event has occurred
that with the passage of time and/or the giving of notice will
constitute a default under any agreement to which such Guarantor is a
party, the effect of which will impair performance by such Guarantor of
his or its respective obligations under this Guaranty. Neither the
execution and delivery of this Guaranty nor compliance with the terms
and provisions hereof will violate any applicable law, rule,
regulation, judgment, decree or order, or will conflict with or result
in any breach of any of the terms, covenants, conditions or provisions
of any indenture, mortgage, deed of trust, instrument, document,
agreement or contract of any kind that creates, represents, evidences
or provides for any lien, charge or encumbrance upon any of the
property or assets of such Guarantor, or any other indenture, mortgage,
deed of trust, instrument, document, agreement or contract of any kind
to which such Guarantor is a party or to which such Guarantor or the
property of such Guarantor may be subject.
(b) There is not any litigation, arbitration, governmental or
administrative proceedings, actions, examinations, claims or demands
pending, or to such Guarantor's knowledge, threatened that could
adversely affect performance by such Guarantor of his or its respective
obligations under this Guaranty.
(c) Neither this Guaranty nor any statement or certification
as to facts previously furnished or required herein to be furnished to
Lender by such Guarantor, contains any material inaccuracy or untruth
in any representation, covenant or warranty or omits to state a fact
material to this Guaranty.
3. CONTINUING GUARANTY. Each Guarantor agrees that the obligations of
such Guarantor pursuant to Section 1 above and any other provision of any of the
Loan Documents shall be primary obligations, shall not be subject to any
counterclaim, set-off, abatement, deferment or defense based upon any claim that
such Guarantor may have against Lender, MMI, any other guarantor of MMI's
Obligations or any other person or entity, and shall remain in full force and
effect without regard to, and shall not be released, discharged or affected in
any way by, any circumstance or condition (whether or not such Guarantor shall
have any knowledge thereof), including without limitation:
(a) any lack of validity or enforceability of the Note or any
of the other Loan Documents;
(b) any termination, amendment, modification or other change
in the Note or any of the other Loan Documents, including, without
limitation, any modification of the interest rate(s) described therein;
(c) any furnishing, exchange, substitution or release of any
collateral securing repayment of the Loan, or any failure to perfect
any lien in such collateral;
(d) any failure, omission or delay on the part of MMI, any
Guarantor, any other guarantor of MMI's Obligations or Lender to
conform or comply with any term of any of the
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Loan Documents or any failure of Lender to give notice of any Event of
Default (as defined in the Loan Agreement);
(e) any waiver, compromise, release, settlement or extension
of time of payment or performance or observance of any of the
obligations or agreements contained in the Note or any of the other
Loan Documents;
(f) any action or inaction by Lender under or in respect of
the Note or any of the other Loan Documents, any failure, lack of
diligence, omission or delay on the part of Lender to enforce, assert
or exercise any right, power or remedy conferred on it in the Note or
any of the other Loan Documents, or any other action or inaction on the
part of Lender;
(g) any voluntary or involuntary bankruptcy, insolvency,
reorganization, arrangement, readjustment, assignment for the benefit
of creditors, composition, receivership, liquidation, marshalling of
assets and liabilities or similar events or proceedings with respect to
MMI, any Guarantor or any other guarantor of MMI's Obligations, as
applicable, or any of their respective property or creditors, or any
action taken by any trustee or receiver or by any court in any such
proceeding;
(h) any merger or consolidation of MMI into or with any
entity, or any sale, lease or transfer of any of the assets of MMI, any
Guarantor or any other guarantor of MMI's Obligations to any other
person or entity;
(i) any change in the ownership of MMI or any change in the
relationship between MMI, any Guarantor or any other guarantor of MMI's
Obligations, or any termination of any such relationship;
(j) any release or discharge by operation of law of MMI or any
other guarantor of MMI's Obligations from any obligation or agreement
contained in any of the Loan Documents; or
(k) any other occurrence, circumstance, happening or event,
whether similar or dissimilar to the foregoing and whether foreseen or
unforeseen, which otherwise might constitute a legal or equitable
defense or discharge of the liabilities of a guarantor or surety or
which otherwise might limit recourse against MMI or any Guarantor.
4. WAIVERS. Each Guarantor unconditionally waives (i) notice of any of
the matters referred to in Section 3 above, (ii) all notices which may be
required by statute, rule of law or otherwise, now or hereafter in effect, to
preserve intact any rights against such Guarantor, including, without
limitation, any demand, presentment and protest, proof of notice of non-payment
under any of the Loan Documents and notice of any Event of Default or any
failure on the part of MMI, any Guarantor or any other guarantor of MMI's
Obligations to perform or comply with any covenant, agreement, term or condition
of any of the Loan Documents, (iii) any right to the enforcement, assertion or
exercise against MMI, any Guarantor or any other guarantor of MMI's Obligations
of any right or remedy conferred under any of the Loan Documents, (iv) any
requirement of diligence
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on the part of any person or entity, (v) to the fullest extent permitted by law
and except as otherwise expressly provided in this Guaranty or the other Loan
Documents, any claims based on allegations that Lender has failed to act in a
commercially reasonable manner, (vi) any requirement to exhaust any remedies or
to mitigate the damages resulting from any default under any of the Loan
Documents, and (vii) any notice of any sale, transfer or other disposition of
any right, title or interest of Lender under any of the Loan Documents.
5. SUBORDINATION. Each Guarantor agrees that any and all present and
future debts and obligations of MMI to such Guarantor hereby are subordinated to
the claims of Lender and hereby are assigned by such Guarantor to Lender as
security for MMI's Obligations and such Guarantor's obligations under this
Guaranty.
6. SUBROGATION WAIVER. Until MMI's Obligations are paid in full and all
periods under applicable bankruptcy law for the contest of any payment by any
Guarantor or MMI as a preferential or fraudulent payment have expired, each
Guarantor knowingly, and with advice of counsel, waives, relinquishes, releases
and abandons all rights and claims to indemnification, contribution,
reimbursement, subrogation and payment which such Guarantor may now or hereafter
have by and from MMI and the successors and assigns of MMI, for any payments
made by such Guarantor to Lender, including, without limitation, any rights
which might allow MMI, MMI's successors, a creditor of MMI, or a trustee in
bankruptcy of MMI to claim in bankruptcy or any other similar proceedings that
any payment made by MMI or MMI's successors and assigns to Lender was on behalf
of or for the benefit of such Guarantor and that such payment is recoverable by
MMI, a creditor or trustee in bankruptcy of MMI as a preferential payment,
fraudulent conveyance, payment of an insider or any other classification of
payment which may otherwise be recoverable from Lender.
7. REINSTATEMENT. The obligations of the Guarantors pursuant to this
Guaranty shall continue to be effective or automatically be reinstated, as the
case may be, if at any time payment of any of MMI's Obligations or the
Guarantors' obligations under this Guaranty is rescinded or otherwise must be
restored or returned by Lender upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of any Guarantor or MMI or otherwise, all as
though such payment had not been made.
8. FINANCIAL STATEMENTS. Each Guarantor hereby represents and warrants
to Lender that (a) the financial statements of such Guarantor previously
submitted to Lender are true, complete and correct in all material respects,
disclose all actual and contingent liabilities, and fairly present the financial
condition of such Guarantor, and do not contain any untrue statement of a
material fact or omit to state a fact material to the financial statements
submitted or this Guaranty and (b) no material adverse change has occurred in
the financial statements from the dates thereof until the date hereof. Each
Guarantor shall furnish to Lender financial statements in accordance with the
terms and conditions set forth in the Loan Agreement.
9. SUCCESSORS AND ASSIGNS; JOINT AND SEVERAL LIABILITIES. This Guaranty
shall inure to the benefit of Lender and its successors and assigns. This
Guaranty shall be binding on each
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Guarantor and the heirs, legatees, successors and assigns of such Guarantor. The
Guarantors shall be jointly and severally liable for the obligations set forth
in this Guaranty.
10. NO WAIVER OF RIGHTS. No delay or failure on the part of Lender to
exercise any right, power or privilege under this Guaranty or any of the other
Loan Documents shall operate as a waiver thereof, and no single or partial
exercise of any right, power or privilege shall preclude any other or further
exercise thereof or the exercise of any other power or right, or be deemed to
establish a custom or course of dealing or performance between the parties
hereto. The rights and remedies herein provided are cumulative and not exclusive
of any rights or remedies provided by law. No notice to or demand on any
Guarantor in any case shall entitle such Guarantor to any other or further
notice or demand in the same, similar or other circumstance.
11. MODIFICATION. The terms of this Guaranty may be waived, discharged,
or terminated only by an instrument in writing signed by the party against which
enforcement of the change, waiver, discharge or termination is sought. No
amendment, modification, waiver or other change of any of the terms of this
Guaranty shall be effective without the prior written consent of Lender.
12. JOINDER. Each Guarantor agrees that any action to enforce this
Guaranty may be brought against such Guarantor without any joinder of MMI or any
other guarantor of MMI's Obligations in such action.
13. SEVERABILITY. In the event that any provision of this Guaranty is
deemed to be invalid by reason of the operation of law, or by reason of the
interpretation placed thereon by any administrative agency or any court, the
Guarantors and Lender shall negotiate an equitable adjustment in the provisions
of the same in order to effect, to the maximum extent permitted by law, the
purpose of this Guaranty and the validity and enforceability of the remaining
provisions, or portions or applications thereof, shall not be affected thereby
and shall remain in full force and effect.
14. APPLICABLE LAW. This Guaranty shall be governed as to validity,
interpretation, effect and in all other respects by laws and decisions of the
State of Illinois.
15. NOTICE. All notices, communications and waivers under this Guaranty
shall be in writing and shall be (i) delivered in person or (ii) mailed, postage
prepaid, either by registered or certified mail, return receipt requested, or
(iii) sent by overnight express carrier, addressed in each case as follows:
To Lender: LaSalle National Bank
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Mr. Xxxxx Xxxxxx
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With copy to: Xxxxxxxx Xxxxxx Xxxxxxxxxxx & Xxxxxx, Chtd.
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxx, Esq.
To any Guarantor: c/o Metal Management, Inc.
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attn: President
With copy to: Xxxxxxx & Xxxxxxxx, Ltd.
000 X. Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx
or to any other address as to any of the parties hereto, as such party shall
designate in a written notice to the other party hereto. All notices sent
pursuant to the terms of this Section 15 shall be deemed received (i) if
personally delivered, then on the date of delivery, (ii) if sent by overnight,
express carrier, then on the next federal banking day immediately following the
day sent, or (iii) if sent by registered or certified mail, then on the earlier
of the third federal banking day following the day sent or when actually
received.
16. JURISDICTION AND VENUE. EACH GUARANTOR HEREBY AGREES THAT ALL
ACTIONS OR PROCEEDINGS INITIATED BY SUCH GUARANTOR AND ARISING DIRECTLY OR
INDIRECTLY OUT OF THIS GUARANTY, THE NOTE OR THE OTHER LOAN DOCUMENTS SHALL BE
LITIGATED IN THE CIRCUIT COURT OF XXXX COUNTY, ILLINOIS, OR THE UNITED STATES
DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS OR, IF LENDER INITIATES
SUCH ACTION, ANY COURT IN WHICH LENDER SHALL INITIATE SUCH ACTION AND WHICH HAS
JURISDICTION. EACH GUARANTOR HEREBY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO
SUCH JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED BY LENDER IN ANY OF SUCH
COURTS, AND HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS AND COMPLAINT, OR
OTHER PROCESS OR PAPERS ISSUED THEREIN, AND AGREES THAT SERVICE OF SUCH SUMMONS
AND COMPLAINT OR OTHER PROCESS OR PAPERS MAY BE MADE BY REGISTERED OR CERTIFIED
MAIL ADDRESSED TO SUCH GUARANTOR AT THE ADDRESS TO WHICH NOTICES ARE TO BE SENT
PURSUANT TO THIS GUARANTY. EACH GUARANTOR WAIVES ANY CLAIM THAT XXXXXXX,
XXXXXXXX XX XXX XXXXXXXX XXXXXXXX XX XXXXXXXX IS AN
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INCONVENIENT FORUM OR AN IMPROPER FORUM BASED ON LACK OF VENUE. SHOULD SUCH
GUARANTOR, AFTER BEING SO SERVED, FAIL TO APPEAR OR ANSWER TO ANY SUMMONS,
COMPLAINT, PROCESS OR PAPERS SO SERVED WITHIN THE NUMBER OF DAYS PRESCRIBED BY
LAW AFTER THE MAILING THEREOF, SUCH GUARANTOR SHALL BE DEEMED IN DEFAULT AND AN
ORDER AND/OR JUDGMENT MAY BE ENTERED BY LENDER AGAINST SUCH GUARANTOR AS
DEMANDED OR PRAYED FOR IN SUCH SUMMONS, COMPLAINT, PROCESS OR PAPERS. THE
EXCLUSIVE CHOICE OF FORUM FOR EACH GUARANTOR SET FORTH IN THIS SECTION SHALL NOT
BE DEEMED TO PRECLUDE THE ENFORCEMENT, BY LENDER, OF ANY JUDGMENT OBTAINED IN
ANY OTHER FORUM OR THE TAKING, BY LENDER, OF ANY ACTION TO ENFORCE THE SAME IN
ANY OTHER APPROPRIATE JURISDICTION, AND EACH GUARANTOR HEREBY WAIVES THE RIGHT,
IF ANY, TO COLLATERALLY ATTACK ANY SUCH JUDGMENT OR ACTION.
17. WAIVER OF RIGHT TO JURY TRIAL. LENDER AND EACH GUARANTOR
ACKNOWLEDGE AND AGREE THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS GUARANTY,
THE NOTE OR THE OTHER LOAN DOCUMENTS OR WITH RESPECT TO THE TRANSACTIONS
CONTEMPLATED HEREIN AND THEREIN WOULD BE BASED UPON DIFFICULT AND COMPLEX ISSUES
AND THEREFORE, THE PARTIES AGREE THAT ANY COURT PROCEEDING ARISING OUT OF ANY
SUCH CONTROVERSY WILL BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE
SITTING WITHOUT A JURY.
IN WITNESS WHEREOF, each Guarantor has executed this Guaranty as of the
date first above written.
/s/ Xxxxxx Xxxxxxxxx
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XXXXXX XXXXXXXXX
/s/ Xxxxxx Xxxxxxxxxx
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XXXXXX XXXXXXXXXX
/s/ Xxxxxx X. Xxxxxx /s/ G. O. Xxxxxxxxx
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XXXXXX X. XXXXXX XXXXXX XXXXXXXXX
/s/ T. Xxxxxxxx Xxxxxxxx /s/ Xxxxxxx X. Xxxx
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T. XXXXXXXX XXXXXXXX XXXXXXX XXXX
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