EXHIBIT 10.32
SUBSIDIARY GUARANTEE
SUBSIDIARY GUARANTEE, dated as of May 22, 1998, made by BAYOU STEEL
CORPORATION (TENNESSEE), a Delaware corporation, and RIVER ROAD REALTY
CORPORATION, a Louisiana corporation (each, a "GUARANTOR"), in favor of THE
CHASE MANHATTAN BANK, as administrative agent (in such capacity, the
"ADMINISTRATIVE AGENT") for the
several banks and other financial institutions (the "LENDERS") from time to time
parties to the Amended and Restated Credit Agreement, dated as of May 22, 1998
(as further amended, supplemented or otherwise modified from time to time, the
"CREDIT AGREEMENT"; unless otherwise defined herein, terms defined in the Credit
Agreement and used herein shall have the meanings given to them in the Credit
Agreement), among Bayou Steel Corporation, a Delaware corporation (the
"BORROWER"), the Lenders and the Administrative Agent.
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders have severally
agreed to make Loans to, and issue and participate in Letters of Credit for the
account of, the Borrower upon the terms and subject to the conditions set forth
therein;
WHEREAS, the Borrower owns directly or indirectly all of the issued and
outstanding stock of each Guarantor;
WHEREAS, the Borrower and each Guarantor are involved in an integrated
business process; and
WHEREAS, it is a condition precedent to the obligation of the Lenders to
make their respective Loans to, and issue and participate in Letters of Credit
for the account of, the Borrower under the Credit Agreement that each Guarantor
shall have executed and delivered this Guarantee to the Administrative Agent for
the ratable benefit of the Lenders.
NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective Loans to, and issue and participate
in Letters of Credit for the account of, the Borrower under the Credit
Agreement, each Guarantor hereby agrees with the Administrative Agent, for the
ratable benefit of the Lenders, as follows:
54. DEFINED TERMS. a. Unless otherwise defined herein, terms defined in
the Credit Agreement and used herein shall have the meanings given to them in
the Credit Agreement.
b. As used herein, "OBLIGATIONS" means the collective reference to the
unpaid principal of and interest on the Loans, any reimbursement obligations in
respect of any Letter of Credit and all other obligations and liabilities of the
Borrower to the Administrative Agent or the Lenders (including,
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without limitation, interest accruing at the then applicable rate provided in
the Credit Agreement after the maturity of the Loans and interest accruing at
the then applicable rate provided in the Credit Agreement after the filing of
any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrower, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding),
whether direct or indirect, absolute or contingent, due or to become due, now
existing or hereafter incurred, which may arise under, out of, or in connection
with, the Credit Agreement, the Loans, any reimbursement obligations in respect
of any Letter of Credit, the other Loan Documents or any other document made,
delivered or given in connection therewith, whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses or
otherwise (including, without limitation, all fees and disbursements of counsel
to the Administrative Agent or to the Lenders that are required to be paid by
the Borrower or any Guarantor pursuant to the terms of the Credit Agreement or
this Agreement or any other Loan Document).
c. The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Guarantee shall refer to this Guarantee as a whole and
not to any particular provision of this Guarantee, and section and paragraph
references are to this Guarantee unless otherwise specified.
d. The meanings given to terms defined herein shall be equally applicable
to both the singular and plural forms of such terms.
55. GUARANTEE a. Subject to the provisions of paragraph 2(b), each
Guarantor hereby unconditionally and irrevocably guarantees to the
Administrative Agent, for the ratable benefit of the Lenders and their
respective successors, indorsees, transferees and assigns, the prompt and
complete payment and performance by the Borrower when due (whether at the stated
maturity, by acceleration or otherwise) of the Obligations.
b. Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of any Guarantor hereunder and under the
other Loan Documents shall in no event exceed the amount which can be guaranteed
by such Guarantor under applicable federal and state laws relating to the
insolvency of debtors.
c. Each Guarantor further agrees to pay any and all expenses (including,
without limitation, all fees and disbursements of counsel) which may be paid or
incurred by the Administrative Agent or any Lender in enforcing, or obtaining
advice of counsel in respect of, any rights with respect to, or collecting, any
or all of the Obligations of such Guarantor and/or enforcing any rights with
respect to, or collecting against, such Guarantor under this Guarantee. This
Guarantee shall remain in full force and effect until the Obligations are paid
in full and the Commitments are terminated, notwithstanding that from time to
time prior thereto the Borrower may be free from any Obligations.
d. Each Guarantor agrees that the Obligations may at any time and from
time to time exceed the amount of the liability of such Guarantor hereunder
without impairing this Guarantee or affecting the rights and remedies of the
Administrative Agent or any Lender hereunder.
e. No payment or payments made by the Borrower, any Guarantor, any other
guarantor or any other Person or received or collected by the Administrative
Agent or any Lender from the Borrower, any Guarantor, any other guarantor or any
other Person by virtue of any action or proceeding or any set-off or
appropriation or application at any time or from time to time in reduction of or
in payment of the Obligations shall be deemed to modify, reduce, release or
otherwise affect the liability of any
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Guarantor hereunder which shall, notwithstanding any such payment or payments
other than payments made by such Guarantor in respect of its Obligations or
payments received or collected from such Guarantor in respect of its
Obligations, remain liable for its Obligations up to the maximum liability of
such Guarantor hereunder until the Obligations are paid in full and the
Commitments are terminated.
f. Each Guarantor agrees that whenever, at any time, or from time to time,
it shall make any payment to the Administrative Agent or any Lender on account
of its liability hereunder, it will notify the Administrative Agent in writing
that such payment is made under this Guarantee for such purpose.
56. RIGHT OF SET-OFF. Upon the occurrence of any Event of Default, each
Guarantor hereby irrevocably authorizes the Administrative Agent and each Lender
at any time and from time to time without notice to the relevant Guarantor or
any other guarantor, any such notice being expressly waived by each Guarantor,
to set-off and appropriate and apply any and all deposits (general or special,
time or demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by the Administrative Agent or such Lender to or for the credit or the
account of such Guarantor, or any part thereof in such amounts as the
Administrative Agent or such Lender may elect, against and on account of the
obligations and liabilities of such Guarantor to the Administrative Agent or
such Lender hereunder and claims of every nature and description of such Lender
against such Guarantor, in any currency, whether arising hereunder, under the
Credit Agreement, any Note, any Loan Documents or otherwise, as the
Administrative Agent or such Lender may elect, whether or not the Administrative
Agent or any Lender has made any demand for payment and although such
obligations, liabilities and claims may be contingent or unmatured. The
Administrative Agent and each Lender shall notify the relevant Guarantor
promptly of any such set-off and the application made by the Administrative
Agent or such Lender, PROVIDED that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of the
Administrative Agent and each Lender under this Section are in addition to other
rights and remedies (including, without limitation, other rights of set-off)
which the Administrative Agent or such Lender may have.
57. NO SUBROGATION. Notwithstanding any payment or payments made by any
Guarantor hereunder or any set-off or application of funds of any Guarantor by
any Lender, no Guarantor shall be entitled to be subrogated to any of the rights
of the Administrative Agent or any Lender against the Borrower or any other
guarantor or any collateral security or guarantee or right of offset held by any
Lender for the payment of the Obligations, nor shall any Guarantor seek or be
entitled to seek any contribution or reimbursement from the Borrower or any
other guarantor in respect of payments made by such Guarantor hereunder, until
all amounts owing to the Administrative Agent and the Lenders by the Borrower on
account of the Obligations are paid in full and the Commitments are terminated.
If any amount shall be paid to any Guarantor on account of such subrogation
rights at any time when all of the Obligations shall not have been paid in full,
such amount shall be held by such Guarantor in trust for the Administrative
Agent and the Lenders, segregated from other funds of such Guarantor, and shall,
forthwith upon receipt by such Guarantor, be turned over to the Administrative
Agent in the exact form received by such Guarantor (duly indorsed by such
Guarantor to the Administrative Agent, if required), to be applied against the
Obligations, whether matured or unmatured, in such order as the Administrative
Agent may determine.
58. AMENDMENTS, ETC. WITH RESPECT TO THE OBLIGATIONS; WAIVER OF RIGHTS.
Each Guarantor shall remain obligated hereunder notwithstanding that, without
any reservation of rights against any Guarantor and without notice to or further
assent by any Guarantor, any demand for payment of any of the Obligations made
by the Administrative Agent or any Lender to any Guarantor may be rescinded
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by such Person and any of the Obligations continued, and the Obligations, or the
liability of any other Person upon or for any part thereof, or any collateral
security or guarantee therefor or right of offset with respect thereto, may,
from time to time, in whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by the Administrative
Agent or any Lender, and the Credit Agreement, the Notes and the other Loan
Documents and any other documents executed and delivered in connection therewith
may be amended, modified, supplemented or terminated, in whole or in part, as
the Administrative Agent (or the Required Lenders, as the case may be) may deem
advisable from time to time, and any collateral security, guarantee or right of
offset at any time held by the Administrative Agent or any Lender for the
payment of the Obligations may be sold, exchanged, waived, surrendered or
released. Neither the Administrative Agent nor any Lender shall have any
obligation to protect, secure, perfect or insure any Lien at any time held by it
as security for the Obligations or for this Guarantee or any property subject
thereto. When making any demand hereunder against any Guarantor, the
Administrative Agent or any Lender may, but shall be under no obligation to,
make a similar demand on the Borrower, the other Guarantor or any other
guarantor, and any failure by the Administrative Agent or any Lender to make any
such demand or to collect any payments from the Borrower, such other Guarantor
or any such other guarantor or any release of the Borrower, such other Guarantor
or such other guarantor shall not relieve the relevant Guarantor of its
obligations or liabilities hereunder, and shall not impair or affect the rights
and remedies, express or implied, or as a matter of law, of the Administrative
Agent or any Lender against such relevant Guarantor. For the purposes hereof
"demand" shall include the commencement and continuance of any legal
proceedings.
59. GUARANTEE ABSOLUTE AND UNCONDITIONAL. Each Guarantor waives any and
all notice of the creation, renewal, extension or accrual of any of its
Obligations and notice of or proof of reliance by the Administrative Agent or
any Lender upon this Guarantee or acceptance of this Guarantee, its Obligations,
and any of them, shall conclusively be deemed to have been created, contracted
or incurred, or renewed, extended, amended or waived, in reliance upon this
Guarantee; and all dealings between the Borrower and any Guarantor, on the one
hand, and the Administrative Agent and the Lenders, on the other hand, likewise
shall be conclusively presumed to have been had or consummated in reliance upon
this Guarantee. Each Guarantor waives diligence, presentment, protest, demand
for payment and notice of default or nonpayment to or upon the Borrower or the
Guarantor with respect to its Obligations. Each Guarantor understands and agrees
that this Guarantee shall be construed as a continuing, absolute and
unconditional guarantee of payment without regard to (a) the validity,
regularity or enforceability of the Credit Agreement, any Note or any other Loan
Document, any of the Obligations or any other collateral security therefor or
guarantee or right of offset with respect thereto at any time or from time to
time held by the Administrative Agent or any Lender, (b) any defense, set-off or
counterclaim (other than a defense of payment or performance) which may at any
time be available to or be asserted by the Borrower against the Administrative
Agent or any Lender, or (c) any other circumstance whatsoever (with or without
notice to or knowledge of the Borrower or any Guarantor) which constitutes, or
might be construed to constitute, an equitable or legal discharge of the
Borrower for the Obligations, or of any Guarantor under this Guarantee, in
bankruptcy or in any other instance. When pursuing its rights and remedies
hereunder against any Guarantor, each of the Administrative Agent and any Lender
may, but shall be under no obligation to, pursue such rights and remedies as it
may have against the Borrower or any other Person or against any collateral
security or guarantee for the Obligations or any right of offset with respect
thereto, and any failure by the Administrative Agent or any Lender to pursue
such other rights or remedies or to collect any payments from the Borrower or
any such other Person or to realize upon any such collateral security or
guarantee or to exercise any such right of offset, or any release of the
Borrower or any such other Person or any such collateral security, guarantee or
right of offset, shall not relieve any Guarantor of any liability
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hereunder, and shall not impair or affect the rights and remedies, whether
express, implied or available as a matter of law, of the Administrative Agent
and the Lenders against any Guarantor. This Guarantee shall remain in full force
and effect and be binding in accordance with and to the extent of its terms upon
each Guarantor and its successors and assigns thereof, and shall inure to the
benefit of the Administrative Agent and the Lenders, and their respective
successors, indorsees, transferees and assigns, until all the Obligations and
the obligations under this Guarantee shall have been satisfied by payment in
full and the Commitments shall be terminated, notwithstanding that from time to
time during the term of the Credit Agreement the Borrower may be free from any
Obligations.
60. REINSTATEMENT. This Guarantee shall continue to be effective, or be
reinstated, as the case may be, if at any time payment, or any part thereof, of
any of the Obligations is rescinded or must otherwise be restored or returned by
the Administrative Agent or any Lender upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of the Borrower or any Guarantor, or
upon or as a result of the appointment of a receiver, intervenor or conservator
of, or trustee or similar officer for, the Borrower or any Guarantor or any
substantial part of its property, or otherwise, all as though such payments had
not been made.
61. PAYMENTS. Each Guarantor hereby guarantees that payments hereunder
will be paid to the Administrative Agent without set-off or counterclaim in U.S.
Dollars at the office of the Administrative Agent located at 000 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000.
62. COVENANTS; FURTHER ASSURANCES. Each Guarantor hereby covenants and
agrees with the Administrative Agent and the Lenders that, from and after the
date of this Guarantee until its Obligations are paid in full and the
Commitments are terminated and the expiration, termination or return to the
Issuing Bank of the Letters of Credit (i) no Guarantor shall take any action,
and each Guarantor shall refrain from taking action, that would result in a
violation of the covenants of the Borrower contained in Article VII of the
Credit Agreement and (ii) at any time and from time to time, upon the written
request of the Administrative Agent, and at the sole expense of the relevant
Guarantor, such relevant Guarantor will promptly and fully execute and deliver
such further instruments and documents and take such further actions as the
Administrative Agent may reasonably request for the purpose of obtaining or
preserving the full benefits of this Guarantee and the other Loan Documents to
which such Guarantor is a party and of the rights and powers herein or therein
granted.
63. AUTHORITY OF AGENT. Each Guarantor acknowledges that the rights and
responsibilities of the Administrative Agent under this Guarantee with respect
to any action taken by the Administrative Agent or the exercise or non-exercise
by the Administrative Agent of any option, right, request, judgment or other
right or remedy provided for herein or resulting or arising out of this
Guarantee shall, as between the Administrative Agent and the Lenders, be
governed by the Credit Agreement and by such other agreements with respect
thereto as may exist from time to time among them, but, as between the
Administrative Agent and any Guarantor, the Administrative Agent shall be
conclusively presumed to be acting as agent for the Lenders with full and valid
authority so to act or refrain from acting, and neither Guarantor shall be under
any obligation, or entitlement, to make any inquiry respecting such authority.
64. NOTICES. All notices, requests and demands to or upon the
Administrative Agent, any Lender or any Guarantor to be effective shall be in
writing (or by telex, fax or similar electronic transfer confirmed in writing)
and shall be deemed to have been duly given or made (1) when delivered by hand
or (2) if given by mail, when deposited in the mails by certified mail, return
receipt requested,
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or (3) if by telex, fax or similar electronic transfer, when sent and receipt
has been confirmed, addressed as follows:
a. if to the Administrative Agent or any Lender, at its address or
transmission number for notices provided in Section 10.01 of the Credit
Agreement; and
b. if to any Guarantor, at its address or transmission number for notices
set forth under its signature below.
The Administrative Agent, each Lender and each Guarantor may change its
address and transmission numbers for notices by notice in the manner provided in
this Section.
65. SEVERABILITY. Any provision of this Guarantee which 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 not invalidate or render unenforceable such provision in any
other jurisdiction.
66. INTEGRATION. This Guarantee represents the agreement of each Guarantor
with respect to the subject matter hereof and there are no promises or
representations by the Administrative Agent or any Lender relative to the
subject matter hereof not reflected herein.
67. AMENDMENTS IN WRITING; NO WAIVER; CUMULATIVE REMEDIES. a. None of the
terms or provisions of this Guarantee may be waived, amended, supplemented or
otherwise modified except by a written instrument executed by each Guarantor and
the Administrative Agent, PROVIDED that any provision of this Guarantee may be
waived by the Administrative Agent and the Lenders in a letter or agreement
executed by the Administrative Agent or by telex or facsimile transmission from
the Administrative Agent.
b. Neither the Administrative Agent nor any Lender shall by any act
(except by a written instrument pursuant to paragraph 14(a) hereof), delay,
indulgence, omission or otherwise be deemed to have waived any right or remedy
hereunder or to have acquiesced in any Default or Event of Default or in any
breach of any of the terms and conditions hereof. No failure to exercise, nor
any delay in exercising, on the part of the Administrative Agent or any Lender,
any right, power or privilege hereunder shall operate as a waiver thereof. No
single or partial exercise of any right, power or privilege hereunder shall
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. A waiver by the Administrative Agent or any Lender of
any right or remedy hereunder on any one occasion shall not be construed as a
bar to any right or remedy which the Administrative Agent or such Lender would
otherwise have on any future occasion.
c. The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.
68. SECTION HEADINGS. The section headings used in this Guarantee are for
convenience of reference only and are not to affect the construction hereof or
be taken into consideration in the interpretation hereof.
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69. SUCCESSORS AND ASSIGNS. This Guarantee shall be binding upon the
successors and assigns of each Guarantor and shall inure to the benefit of the
Administrative Agent and the Lenders and their successors and assigns.
70. WAIVER OF JURY TRIAL. Each Guarantor hereby waives, to the fullest
extent permitted by applicable law, any right it may have to a trial by jury in
respect of any litigation directly or indirectly arising out of, under or in
connection with this Guarantee or any of the other Loan Documents. Each
Guarantor (a) certifies that no representative, agent or attorney of any other
party has represented, expressly or otherwise, that such other party would not,
in the event of litigation, seek to enforce the foregoing waiver and (b)
acknowledges that it has been induced to enter into this Guarantee by, among
other things, the mutual waivers and certifications in this paragraph 17.
71. JURISDICTION; CONSENT TO SERVICE OF PROCESS. (a) 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
Guarantee or the other Loan Documents, 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 such New York State or, to the extent permitted by law, in such
Federal court. 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
Guarantee shall affect any right that any Lender may otherwise have to bring any
action or proceeding relating to this Guarantee or the other Loan Documents
against the Borrower or its properties in the courts of any jurisdiction.
(b) Each Guarantor hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Guarantee or the other Loan
Documents 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 action or proceeding in any such
court.
(c) Each Guarantor irrevocably consents to service of process in the
manner provided for notices in Section 10.01 of the Credit Agreement. Nothing in
this Guarantee will affect the right of any party to this Guarantee to serve
process in any other manner permitted by law.
72. GOVERNING LAW. THIS GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE
OF NEW YORK.
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IN WITNESS WHEREOF, the undersigned has caused this Guarantee to be
duly executed and delivered by its duly authorized officer as of the day and
year first above written.
BAYOU STEEL CORPORATION (TENNESSEE)
By ---------------------------------
Title -----------------------------
Address for Notices:
Xxxxx Xxxx
Xx Xxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Telecopy No.: 000-000-0000
RIVER ROAD REALTY CORPORATION
By ---------------------------------
Title -----------------------------
Address for Notices:
Xxxxx Xxxx
Xx Xxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Telecopy No.: 000-000-0000
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