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EXHIBIT 10.2
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GUARANTY
Dated as of July 30, 1997
by
ROUGE INDUSTRIES, INC.
as Guarantor,
in favor of
THE CHASE MANHATTAN BANK,
as Agent
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GUARANTY
GUARANTY dated as of July 30, 1997 (this "Guaranty"), by Rouge
Industries, Inc., a Delaware corporation ("Holdings" and a "Guarantor") in
favor of The Chase Manhattan Bank, as agent for the Banks referred to below (in
such capacity, together with its successors in such capacity, the "Agent").
W I T N E S S E T H
WHEREAS, pursuant to the terms of the Amended and Restated
Credit Agreement dated as of the date hereof (as the same may be further
amended, supplemented, restated or otherwise modified from time to time, the
"Credit Agreement") among Holdings, Rouge Steel Company, a Delaware corporation
(the "Borrower"), the financial institutions which are or may become a party
thereto (individually a "Bank" and collectively the "Banks") and the Agent, the
Banks have agreed to make Loans (as defined in the Credit Agreement) and to
issue Letters of Credit (as defined in the Credit Agreement) for the account of
the Borrower;
WHEREAS, in connection with a restructuring of the Borrower's
consolidated group, Guarantor has become the owner of all of the outstanding
capital stock of the Borrower and will derive economic benefit from the
proceeds of the Loans and the issuance of Letters of Credit; and
WHEREAS, it is a condition precedent to each of the
above-described extensions of credit to the Borrower that the Guarantor shall
have executed and delivered to the Agent, for the benefit of the Banks, this
Guaranty; and
WHEREAS, the Guarantor desires to execute and deliver this
Guaranty to satisfy the conditions described in the preceding paragraph.
NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration the
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receipt and sufficiency of which are hereby acknowledged and in order to induce
the Banks to make Loans under and issue Letters of Credit pursuant to the
Credit Agreement, the Guarantor agrees with and for the benefit of the Agent
and the Banks, as follows:
Section 1. Definitions. Unless otherwise defined herein, all
capitalized terms used herein and not otherwise defined herein shall have the
meanings set forth in the Credit Agreement. "Guaranteed Parties" shall mean,
collectively, the Agent and the Banks.
Section 2. Guarantee.
A. Guarantee. The Guarantor hereby absolutely,
unconditionally and irrevocably guarantees to each Bank and the Agent and their
respective successors and assigns (as primary obligor and not merely as surety)
the prompt payment in full when due (whether at stated maturity, by
acceleration or otherwise) of the principal of and interest on the Loans made
by the Banks to the Borrower, all reimbursement obligations in respect of
Letters of Credit and all other amounts, including, but not limited to, Fees
and other expenses, from time to time owing to the Banks or the Agent by the
Borrower under the Credit Agreement and all other Loan Documents (the
obligations so described and guaranteed hereunder being herein collectively
called the "Guaranteed Obligations"). The Guarantor hereby further agrees that
if the Borrower shall fail to pay when due (whether at stated maturity, by
acceleration or otherwise) any of the Guaranteed Obligations, the Guarantor
will promptly pay the same, without any demand or notice whatsoever, and that
in the case of any extension of time of payment or renewal of any of the
Guaranteed Obligations, the same will be promptly paid in full when due
(whether at the extended maturity, by acceleration or otherwise) in accordance
with the terms of such extension or renewal. Any and all payments by the
Guarantor hereunder shall be made free and clear of and without deduction for
any set-off or counterclaim.
B. Obligations Unconditional. The obligations of the
Guarantor under Section 2.A are absolute and unconditional, irrespective of any
lack of value, genuineness, authorization, legality, validity, regularity or
enforceability of the Credit Agreement or the Notes exe-
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cuted and delivered by the Borrower thereunder, any other Loan Document or any
Letter of Credit (said documents, agreements and instruments being herein
collectively called the "Guaranteed Instruments"), and irrespective of any lack
of value, genuineness, validity, regularity or enforceability of any other
instrument executed and delivered in connection with the Guaranteed
Instruments, or any substitution, release or exchange of any other guarantee or
security for any of the Guaranteed Obligations, and, to the fullest extent
permitted by applicable law, irrespective of any other circumstance whatsoever
which might otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor, it being the intent of this Section 2.B that the
obligations of the Guarantor under Section 2.A shall be absolute and
unconditional under any and all circumstances. Without limiting the generality
of the foregoing, it is agreed that the occurrence of any one or more of the
following shall not affect the liability of the Guarantor hereunder:
(i) at any time or from time to time,
without notice to the Guarantor, the time for any performance of or
compliance with any of the Guaranteed Obligations shall be extended,
or such performance or compliance shall be waived;
(ii) any of the acts mentioned in any of the
provisions of the Guaranteed Instruments shall be done or omitted;
(iii) the maturity of any of the Guaranteed
Obligations shall be accelerated, or any of the Guaranteed Obligations
shall be modified, supplemented or amended in any respect, or any
right under the Guaranteed Instruments shall be waived or any other
guarantee of any of the Guaranteed Obligations or any security
therefor shall be released or exchanged in whole or in part or
otherwise dealt with;
(iv) any lien or security interest granted
to, or in favor of, the Agent or any Bank as security for any of the
Guaranteed
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Obligations shall fail to be valid or perfected;
(v) any bankruptcy, insolvency,
reorganization, arrangement, readjustment, liquidation or similar
proceeding with respect to the Borrower or any of its respective
properties, or any action taken by any trustee or receiver or by any
court in any such proceeding;
(vi) the disaffirmance or rejection or
purported disaffirmance or purported rejection of any of the
Guaranteed Instruments in any insolvency, bankruptcy or reorganization
proceeding relating to the Guarantor or the Borrower or otherwise;
(vii) whether the Agent or any Bank shall
have taken or failed to have taken any steps to collect or enforce any
obligation or liability from the Borrower or shall have taken any
actions to mitigate its damages;
(viii) whether the Agent or any Bank shall
have taken or failed to have taken any steps to collect or enforce any
guaranty or to proceed against any security for any Guaranteed
Obligation;
(ix) any law, regulation or decree now or
hereafter in effect which might in any manner affect any of the
provisions of this Guaranty, the Credit Agreement, the Notes, any
Letter of Credit or any other Loan Document, or any of the rights,
powers or remedies hereunder or thereunder of the Agent and/or the
Banks, or which might cause or permit to be invoked any alteration in
the time, amount or manner of payment or performance of the
Guarantor's or Borrower's obligations and liabilities hereunder or
thereunder;
(x) any merger or consolidation of either
the Borrower or the Guarantor into or with any other Person or any
sale, lease or transfer of all or any of the assets of either
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the Borrower or the Guarantor to any other Person;
(xi) any change in the ownership of any
shares of capital stock of either the Borrower or the Guarantor;
(xii) to the extent as may be waived by
applicable law, the benefit of all principles or provisions of law,
statutory or otherwise, which may be in conflict with the terms
hereof;
(xiii) any circumstances which might
otherwise constitute a defense available to or a discharge of the
Guarantor in respect of its obligations or liabilities hereunder or
under the Guaranteed Instruments.
(xiv) any failure on the part of either the
Guarantor or the Borrower to comply with the re- quirements of law,
regulation or order of any governmental authority, political
subdivision or agency thereof.
C. Reinstatement. The obligations of the Guarantor
under this Section 2 shall be automatically reinstated if and to the extent
that for any reason any payment by the Borrower or on behalf of the Borrower
(by the Guarantor or any other Person) is rescinded or must be otherwise
restored by any holder of any of the Guaranteed Obligations, whether as a
preferential or fraudulent transfer under the Bankruptcy Code, any applicable
state insolvency law, or any other similar federal or state law now or
hereafter in effect or otherwise and the Guarantor agrees that it will
indemnify the Agent and each Bank on demand for all reasonable costs and
expenses (including, without limitation, fees of counsel) incurred by the Agent
or such Bank in connection with such rescission or restoration.
D. Subrogation. The Guarantor hereby waives, until the
Credit Agreement and all other Loan Documents are terminated and all
Obligations have been indefeasibly paid in full, any claim, right or remedy
that the Guarantor may now have or hereafter acquire against the Borrower that
arises hereunder including, without limitation,
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any claim, remedy or right of subrogation, reimbursement, exoneration,
contribution or participation in any claim, right or remedy of subrogation,
reimbursement, exoneration, contribution or participation in any claim, right
or remedy of such Guarantor against the Borrower whether or not such claim,
right or remedy arises in equity, under contract, by statute, under common law
or otherwise. If any amount shall erroneously be paid to the Guarantor on
account of such subrogation, contribution, reimbursement, indemnity and similar
rights, such amount shall be held in trust for the benefit of the Banks and
shall forthwith be paid to the Agent to be credited against the payment of the
Guaranteed Obligations, whether matured or unmatured, in accordance with the
terms of the Loan Documents.
E. Remedies. The Guarantor agrees that, as between the
Guarantor and the Banks, the obligations of the Borrower under the Guaranteed
Instruments may be declared to be forthwith due and payable as provided in the
Credit Agreement (and shall be deemed to have become automatically due and
payable in the circumstances provided in the Credit Agreement) for purposes of
Section 2.A hereof notwithstanding any stay, injunction or other prohibition
preventing such declaration as against the Borrower and that, in the event of
such declaration (or such obligations from becoming automatically due and
payable), such obligations (whether or not due and payable by the Borrower)
shall forthwith become due and payable by the Guarantor for purposes of Section
2.A hereof.
F. Continuing Guarantees. The guarantees in this
Section 2 are continuing guarantees and shall apply to all Guaranteed
Obligations whenever arising.
G. Waiver of Demands, Notices, etc. The Guarantor
hereby unconditionally and irrevocably waives, to the extent permitted by
applicable law, (i) notice of any of the matters referred to in this Section 2;
(ii) all notices which may be required by statute, rule or law or otherwise,
now or hereafter in effect, to preserve any rights against the Guarantor
hereunder, including, without limitation, any demand, proof or notice of
non-payment of the Guaranteed Obligations; (iii) acceptance of this Guaranty,
demand, protest, presentment, notice of default or dishonor and any requirement
of diligence; (iv) any requirement to exhaust any remedies or to miti-
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gate any damages resulting from a default by the Borrower under the Credit
Agreement; (v) any requirement that any Guaranteed Party protect, secure,
perfect or insure any security interest in or any Lien on any property subject
thereto or exhaust any right or take any action against the Borrower, the
Guarantor, any other guarantor of the Guaranteed Obligations or any other
Person or any collateral or security or any balance of any deposit accounts or
credit on the books of any Bank in favor of the Borrower, the Guarantor or any
other Person; and (vi) any other circumstance whatsoever which might otherwise
constitute a legal or equitable discharge, release or defense of a guarantor or
surety, or which might otherwise limit recourse against the Guarantor.
H. Severability. The Guarantor hereby further agrees
that the Guaranteed Parties may pursue their rights and remedies under this
Guaranty and shall be entitled to payment of the full amount owing hereunder
notwithstanding any other guarantee of or security, in favor of the Guaranteed
Parties or any lack of validity or enforceability thereof, or any failure to
perfect or to exercise any right, remedy, power or privilege with respect to
such security, if any, or any payment received thereunder.
Section 3. Covenants.
The Guarantor agrees to perform, comply with and be bound by,
for the benefit of the Agent and each of the Banks, each of the covenants,
agreements and obligations contained in Sections 5 and 6 of the Credit
Agreement as amended, modified, restated and supplemented and in effect from
time to time which are applicable to it.
Section 4. Miscellaneous.
A. No Waiver. No failure on the part of the Agent or
any of its agents to exercise, and no course of dealing with respect to, and no
delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise by the Agent or any of
its agents of any right, power or remedy hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
The remedies herein are cumulative and are not exclusive of any remedies
provided by law.
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B. Expenses. The Guarantor agrees to pay to the Agent
all out-of-pocket expenses (including, but not limited to, reasonable expenses
for legal services of every kind) of, or incident to, the enforcement of any of
the provisions of this Guaranty.
C. Further Assurances. The Guarantor agrees that, from
time to time upon the written request of the Agent, the Guarantor will execute
and deliver such further documents and do such other acts and things as the
Agent may reasonably request in order fully to effect the purposes of this
Guaranty.
D. GOVERNING LAW. THIS GUARANTY SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. THE
GUARANTOR HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE
COURT SITTING IN NEW YORK CITY FOR THE PURPOSES OF ALL LEGAL PROCEEDINGS
ARISING OUT OF OR RELATING TO THIS GUARANTY OR THE TRANSACTIONS CONTEMPLATED
HEREBY. THE GUARANTOR IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE
VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY
SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM. THE GUARANTOR AND THE AGENT HEREBY IRREVOCABLY WAIVE, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
E. Notices. All notices, requests, consents and demands
hereunder shall be in writing and telecopied or delivered to the intended
recipient at its address or telecopier number as specified on the signature
pages hereto and shall be deemed to have been given at the times specified in
Section 9.3 of the Credit Agreement.
F. Waivers, Amendments, etc. The terms of this Guaranty
may be waived, altered or amended only by an instrument in writing duly
executed by the Guarantor and the Agent (in accordance with the provisions
specified in Section 9.5 of the Credit Agreement). Any such amendment or
waiver shall be binding upon the Guarantor, the Agent, each Bank and each
subsequent holder of any Guaranteed Obligation.
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G. Successors and Assigns. This Guaranty shall be
binding upon and inure to the benefit of the respective successors and assigns
of the Guarantor, the Agent, each Bank and each subsequent holder of the
Guaranteed Obligations; provided, however, that the Guarantor shall not assign
or transfer its rights hereunder without the prior written consent of the
Agent.
H. Termination. The guarantee made hereunder shall
terminate when all the Guaranteed Obligations have been indefeasibly paid in
full and the Banks have no further commitment to lend under the Credit
Agreement, the Letters of Credit Outstanding have been reduced to zero and the
Issuing Bank has no further obligation to issue Letters of Credit under the
Credit Agreement and shall continue to be effective or be reinstated, as the
case may be, if at any time payment, or any part thereof, of any Guaranteed
Obligation is rescinded or must otherwise be restored by any Bank or the
Guarantor upon the bankruptcy or reorganization of the Borrower, the Guarantor
or otherwise.
I. Counterparts. This Guaranty may be executed in one
or more counterparts and all of such counterparts taken together shall
constitute one and the same instrument.
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IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to
be duly executed by its officer thereunto duly authorized as of the date first
above written.
ROUGE INDUSTRIES, INC.,
as Guarantor
By: /s/ Xxxx X. Xxxxxxxxxxx
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Name: Xxxx X. Xxxxxxxxxxx
Title: Vice President and Chief
Financial Officer
Notice Address:
0000 Xxxxxx Xxxx
X.X. Xxx 0000
Xxxxxxxx, Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
THE CHASE MANHATTAN BANK,
as Agent
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: Vice President
Notice Address:
One Chase Xxxxxxxxx Xxxxx
Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
