Exhibit 10.1

 

Execution Version

 

ESCROW AGREEMENT

 

This Escrow Agreement (“Escrow Agreement”) is entered into as of September 9,
2014 by and among Steel Dynamics, Inc., an Indiana corporation (the “Issuer”),
Wells Fargo Bank, National Association, a national banking association, as
escrow agent (the “Escrow Agent”), and Wells Fargo Bank, National Association, a
national banking association, as trustee (the “Trustee”) under each of the
Indentures (as defined below).

 

WHEREAS, (i) pursuant to the indenture, dated as of September 9, 2014 (as may be
amended, supplemented or otherwise modified from time to time, the “2021 Notes
Indenture”), among the Issuer, the Guarantors named therein and the Trustee, the
Issuer will issue $700,000,000 in aggregate principal amount of 5.125% Senior
Notes due 2021 (the “2021 Notes”) and (ii) pursuant to the indenture, dated as
of September 9, 2014 (as may be amended, supplemented or otherwise modified from
time to time, the “2024 Notes Indenture” and, together with the 2021 Notes
Indenture, the “Indentures” and each, an “Indenture”), among the Issuer, the
Guarantors named therein and the Trustee, the Issuer will issue $500,000,000 in
aggregate principal amount of 5.500% Senior Notes due 2024 (the “2024 Notes”
and, together with the 2021 Notes, the “Notes”).  The Notes are being issued in
an unregistered offering (the “Offering”) pursuant to that certain purchase
agreement, dated September 4, 2014 (the “Purchase Agreement”), among the Issuer,
certain subsidiaries of the Company signatories thereto and Goldman, Sachs & Co.
(“Goldman Sachs”), Merrill Lynch, Pierce, Fenner & Smith Incorporated (“Merrill
Lynch”), Morgan Stanley & Co. LLC (“Morgan Stanley”), as representatives of the
several initial purchasers named therein (the “Initial Purchasers”), and in
connection with the offering of the Notes, the Issuer prepared a preliminary
offering memorandum dated September 4, 2014 (the “Preliminary Offering
Memorandum”) and a final offering memorandum dated September 4, 2014 (the “Final
Offering Memorandum”);

 

WHEREAS, the Notes are being issued in connection with the acquisition (the
“Acquisition”) of Severstal Columbus, LLC, a Delaware limited liability company
(“Columbus”), by the Company pursuant to the membership interest purchase
agreement dated as of July 18, 2014 (the “Acquisition Agreement”), among the
Company, Columbus and Severstal Columbus Holdings, LLC, a Delaware limited
liability company;

 

WHEREAS, pursuant to the terms of the Indentures, the Issuer will redeem all of
the Notes on the earliest of (a) the third business day after the date on which
the Acquisition Agreement is terminated, (b) the third business day after the
date on which the Issuer determines (in its discretion) that the conditions to
the release of the Escrow Property (as defined herein) cannot be satisfied by
April 18, 2015, and (c) April 21, 2015 (the “Redemption Deadline”), if the
Acquisition is not consummated by April 18, 2015;

 

WHEREAS, Pending consummation of the Acquisition, the Issuer has agreed to place
in escrow certain funds and the Escrow Agent agrees to hold and distribute such
funds in accordance with the terms of this Escrow Agreement.

 

NOW, THEREFORE, it is mutually agreed as follows:

 

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ARTICLE ONE

 

ESCROW DEPOSIT

 

Section 1.01                             Appointment of Escrow Agent.

 

The Issuer hereby appoints Wells Fargo Bank, National Association as Escrow
Agent hereunder.

 

Section 1.02                             Receipt of Escrow Property.

 

Upon execution hereof, the Issuer shall deliver to the Escrow Agent the amount
of $1,200,000,000 (the “Escrow Property”) in immediately available funds.  Upon
receipt of the Escrow Property the Escrow Agent shall deposit the Escrow
Property in a segregated account (the “Escrow Account”). The Escrow Agent and
the Trustee shall give notice of such receipt, in the form attached hereto as
Exhibit A, to the Issuer.

 

Section 1.03                             Investments.

 

(a)                                 The Escrow Agent is authorized and directed
to deposit, transfer, hold and invest the Escrow Property and any investment
income thereon as set forth in Exhibit E hereto, or as set forth in any
subsequent written instruction signed by the Issuer. Absent its timely receipt
of instructions from the Issuer, the Escrow Agent shall have no duty to invest
(or otherwise pay interest on) the Escrow Property.  With respect to any Escrow
Property received by Escrow Agent after 10:00 a.m., New York City time, Escrow
Agent shall not be required to invest such funds or to effect any investment
instruction until the next Business Day. For purposes of this Escrow Agreement
“Business Day” shall mean any day that the Escrow Agent is open for business. 
Any investment earnings and income on the Escrow Property shall become part of
the Escrow Property, and shall be disbursed in accordance with Section 1.04 or
Section 1.06 of this Escrow Agreement.

 

(b)                                 The Escrow Agent is hereby authorized and
directed to sell or redeem any such investments to make any payments or
distributions required under this Escrow Agreement.  The Escrow Agent shall have
no responsibility or liability for any loss, fee, tax, penalty or other charge
which may result from any investment, reinvestment, sale or liquidation of
investment made pursuant to this Escrow Agreement.  The Escrow Agent is hereby
authorized, in making or disposing of any investment permitted by this Escrow
Agreement, to deal with itself (in its individual capacity) or with one or more
of its affiliates, whether it or any such affiliate is acting as agent of the
Escrow Agent or for any third person or dealing as principal for its own
account.  The Issuer acknowledges that the Escrow Agent is not providing
investment supervision, recommendations or advice.  The Escrow Agent shall be
under no duty to afford the Escrow Property any greater degree of care than it
gives its own similar property.

 

Section 1.04                             Disbursements.

 

(a)                                 If the Escrow Agent shall have received a
certificate from the Issuer in the form attached hereto as Exhibit B (the
“Consummation Release Certificate”), executed by one of the authorized
signatories listed on Exhibit D to this Escrow Agreement, then the Escrow Agent

 

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shall release and deliver all amounts in the Escrow Account in accordance with
the instructions and on the date provided therein, which date shall be no later
than the Redemption Deadline; provided that such Consummation Release
Certificate is received by the Escrow Agent no later than 9:00 a.m. (Eastern
time) on the third business day prior to the day on which the release is to
occur; provided further that if a Redemption Release Certificate (as defined
below) has been delivered no later than 9:00 a.m. (Eastern time) on the third
business day prior to the Redemption Deadline because the Acquisition has not
been consummated, the Issuer may revoke such Redemption Release Certificate by
delivering a Consummation Release Certificate to the Escrow Agent prior to
9:00 a.m. (Eastern time) on the Redemption Deadline.  The Escrow Agent shall
confirm in writing to the Issuer that the Escrow Property has been released by
it in accordance with the Consummation Release Certificate.

 

(b)                                 If the Escrow Agent shall have received a
certificate from the Issuer in the form attached hereto as Exhibit C (the
“Redemption Release Certificate”), executed by one of the authorized signatories
listed on Exhibit D to this Escrow Agreement, then the Escrow Agent shall
release to the Trustee from the Escrow Account the amount specified in the
Redemption Release Certificate in accordance with the instructions and on the
date provided therein, which date shall be no later than the Redemption Deadline
(the “Special Redemption Date”); provided that such Redemption Release
Certificate is received by the Escrow Agent no later than 9:00 a.m. (Eastern
time) on the third business day prior to the day on which the release is to
occur; provided further that if the Redemption Release Certificate is not
received by 9:00 a.m. (Eastern time) on the Redemption Deadline, then the Escrow
Agent shall, without the requirement of notice to or action by the Issuer or any
other person, promptly release and deliver all amounts in the Escrow Account to
the Trustee on the Redemption Deadline.  The Escrow Agent shall confirm in
writing to the Issuer that the Escrow Property has been released by it in
accordance with the Redemption Release Certificate.  A Redemption Release
Certificate may be revoked as provided in paragraph (a) of this Section 1.04.

 

(c)                                  If any funds remain in the Escrow Account
after funds sufficient to pay for the redemption of the Notes on the Special
Redemption Date have been released from the Escrow Account to the Trustee
pursuant to paragraph (b) of this Section 1.04, then such remaining funds shall,
on or prior to the close of business on the Special Redemption Date, be released
and delivered to the Issuer in accordance with the instructions provided in the
Redemption Release Certificate.

 

(d)                                 The Escrow Agent shall confirm each funds
transfer instruction received in the name of Issuer by means of the security
procedure selected by Issuer and communicated to the Escrow Agent through a
signed certificate in the form of Exhibit D attached hereto, which upon receipt
by the Escrow Agent shall become a part of this Escrow Agreement.  Once
delivered to the Escrow Agent, Exhibit D may be revised or rescinded only by a
writing signed by an authorized representative of Issuer.  Such revisions or
rescissions shall be effective only after actual receipt and following such
period of time as may be necessary to afford the Escrow Agent a reasonable
opportunity to act on it.  If a revised Exhibit D or a rescission of an existing
Exhibit D is delivered to the Escrow Agent by an entity that is a
successor-in-interest to Issuer, such document shall be accompanied by
additional documentation satisfactory to the Escrow Agent showing that such
entity has succeeded to the rights and responsibilities of Issuer under this
Escrow Agreement.

 

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(e)                                  Issuer understands that the Escrow Agent’s
inability to receive or confirm funds transfer instructions pursuant to the
security procedure selected by Issuer may result in a delay in accomplishing
such funds transfer, and agree that the Escrow Agent shall not be liable for any
loss caused by any such delay.

 

Section 1.05                             Income Tax Allocation and Reporting.

 

(a)                                 The Issuer agrees that, for tax reporting
purposes, all interest and other income from investment of the Escrow Property
shall, as of the end of each calendar year and to the extent required by the
Internal Revenue Service, be reported as having been earned by the Issuer,
whether or not such income was disbursed during such calendar year.

 

(b)                                 Prior to the date hereof, the Issuer shall
provide the Escrow Agent with certified tax identification numbers by furnishing
appropriate forms W-9 or W-8 and such other forms and documents that the Escrow
Agent may request.  The Issuer understands that if such tax reporting
documentation is not provided and certified to the Escrow Agent, the Escrow
Agent may be required by the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder, to withhold a portion of any interest or
other income earned on the investment of the Escrow Property.

 

(c)                                  To the extent that the Escrow Agent becomes
liable for the payment of any taxes in respect of income derived from the
investment of the Escrow Property, the Escrow Agent shall satisfy such liability
to the extent possible from the Escrow Property.  The Issuer shall indemnify,
defend and hold the Escrow Agent harmless from and against any tax, late
payment, interest, penalty or other cost or expense that may be assessed against
the Escrow Agent on or with respect to the Escrow Property and the investment
thereof unless such tax, late payment, interest, penalty or other expense was
directly caused by the gross negligence or willful misconduct of the Escrow
Agent.  The indemnification provided by this Section 1.05(c) is in addition to
the indemnification provided in Section 3.02 hereof and shall survive the
resignation or removal of the Escrow Agent and the termination of this Escrow
Agreement.

Section 1.06                             Termination.

 

This Escrow Agreement shall terminate on the earlier of (i) the Redemption
Deadline or (ii) upon the disbursement of all of the Escrow Property, including
any interest and investment earnings thereon, and shall thereafter be of no
further force and effect, except that the provisions of Sections 1.05(c), 3.01
and 3.02 hereof shall survive such termination.

 

ARTICLE TWO

 

DUTIES OF THE ESCROW AGENT

 

Section 2.01                             Scope of Responsibility.

 

Notwithstanding any provision to the contrary, the Escrow Agent is obligated
only to perform the duties specifically set forth in this Escrow Agreement,
which shall be deemed purely ministerial in nature.  Under no circumstances will
the Escrow Agent be deemed to be a fiduciary to the Issuer or any other person
under this Escrow Agreement.  The Escrow Agent will

 

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not be responsible or liable for the failure of the Issuer to perform in
accordance with this Escrow Agreement. The Escrow Agent shall neither be
responsible for, nor chargeable with, knowledge of the terms and conditions of
any other agreement, instrument, or document other than this Escrow Agreement,
whether or not an original or a copy of such agreement has been provided to the
Escrow Agent; and the Escrow Agent shall have no duty to know or inquire as to
the performance or nonperformance of any provision of any such agreement,
instrument, or document.  References in this Escrow Agreement to any other
agreement, instrument, or document are for the convenience of the Issuer, and
the Escrow Agent has no duties or obligations with respect thereto.  This Escrow
Agreement sets forth all matters pertinent to the escrow contemplated hereunder,
and no additional obligations of the Escrow Agent shall be inferred or implied
from the terms of this Escrow Agreement or any other agreement.

 

Section 2.02                             Authorized Signors.

 

Concurrent with the execution of this Escrow Agreement, the Issuer shall deliver
to the Escrow Agent Exhibit D which contains authorized signer designations in
Part I thereof.

 

ARTICLE THREE

 

PROVISIONS CONCERNING THE ESCROW AGENT AND THE TRUSTEE

 

Section 3.01                             Compensation.

 

For services rendered hereunder, the Escrow Agent shall be entitled to such
compensation as shall have been previously agreed to in writing between the
Issuer and the Escrow Agent.  The Issuer agrees to pay such compensation and to
reimburse the Escrow Agent for the out-of-pocket expenses (including, without
limitation, attorneys’ and other professionals’ fees and expenses) incurred by
it in connection with the services rendered by it hereunder.  In the event that
any fees and expenses owed to the Escrow Agent (or its counsel) are not paid to
the Escrow Agent within 90 calendar days following the presentment of an invoice
for the payment of such fees and expenses or the demand for such payment, then
the Escrow Agent may, without further action or notice, pay such fees from the
Escrow Property and may sell, convey or otherwise dispose of any Escrow Property
for such purpose.  The Escrow Agent may, in its sole discretion, withhold from
any distribution of the Escrow Property an amount equal to any unpaid fees and
expenses to which the Escrow Agent is entitled hereunder.  The provisions of
this Section shall survive the termination of this Escrow Agreement or the
resignation or removal of the Escrow Agent.

 

Section 3.02                             Indemnification.

 

The Issuer agrees to indemnify the Escrow Agent for, and to hold it harmless
against, any and all loss, liability, damage, claim, cost or expense, including
attorneys’ fees and expenses (including the costs and expenses of defending
against any claim of liability, regardless of who asserts such claim), incurred
by the Escrow Agent arising out of or in connection with its appointment as
Escrow Agent hereunder, except such losses, liabilities, damages, claims, costs
or expenses as may be finally adjudicated to have resulted from the gross
negligence or willful misconduct of the Escrow Agent.  The Escrow Agent shall
incur no liability and shall be

 

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indemnified and held harmless by the Issuer for, or in respect of, any actions
taken, omitted to be taken or suffered to be taken in good faith by the Escrow
Agent in reliance upon any signature, endorsement, assignment, certificate,
order, request, notice, instruction or other instrument or document believed to
be valid and genuine.  The Escrow Agent shall notify the Issuer, by letter or
facsimile transmission, of a claim against the Escrow Agent or of any action
commenced against the Escrow Agent, promptly after the Escrow Agent shall have
received written notice thereof.  The Issuer shall be entitled to participate at
its own expense in the defense of any such claim or other action and, if the
Issuer so elects, the Issuer shall assume the defense of any suit brought to
enforce any such claim.  In the event that the Issuer assumes the defense of any
such suit, the Issuer shall not be liable for the fees and expenses of any
additional counsel thereafter retained by the Escrow Agent, so long as the
Issuer shall retain counsel satisfactory to the Escrow Agent; provided, that the
Issuer shall not be entitled to assume the defense of any such action if the
named parties to such action include both the Escrow Agent and the Issuer and
representation of both parties by the same counsel would, in the written opinion
of the Escrow Agent’s counsel, be inappropriate due to actual or potential
conflicting interests between the Escrow Agent and the Issuer.  The provisions
of this Section shall survive the termination of this Escrow Agreement or the
resignation or removal of the Escrow Agent.

 

Section 3.03                             Rights of Escrow Agent.

 

The Escrow Agent:

 

(a)                                 shall not be liable for any act or omission
by it unless such act or omission constitutes gross negligence or willful
misconduct; in no event shall the Escrow Agent be liable to the Issuer or any
third party for special, punitive, indirect or consequential damages, including
but not limited to lost profits, irrespective of whether the Escrow Agent has
been advised of the likelihood of such loss or damage and regardless of the form
of action arising in connection with this Escrow Agreement;

 

(b)                                 shall have no duties or obligations other
than those specifically set forth herein or as may be subsequently agreed to in
writing between the Escrow Agent and the Issuer and the Escrow Agent shall have
no liability under, and no duty to inquire as to, the provisions of any
agreement other than this Escrow Agreement;

 

(c)                                  shall not be obligated to take any action
hereunder which might in the Escrow Agent’s judgment involve any risk of
expense, loss or liability, unless it shall have been furnished with indemnity
and/or security satisfactory to it;

 

(d)                                 may conclusively rely on and shall be
protected in acting or refraining from acting upon any certificate, instrument,
opinion, notice, letter, or other document or security delivered to it and
believed by it to be genuine and to have been signed or presented by the proper
person or persons;

 

(e)                                  may conclusively rely on and shall be
protected in acting or refraining from acting upon written or oral instructions
from the Issuer;

 

(f)                                   may consult with counsel of its selection,
including its in-house counsel, with respect to any questions relating to its
duties and responsibilities and the advice or opinion

 

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of such counsel, or any opinion of counsel to the Issuer provided to the Escrow
Agent shall be full and complete authorization and protection in respect of any
action taken, suffered or omitted to be taken by the Escrow Agent hereunder in
accordance with the advice or opinion of such counsel; and

 

(g)                                  may perform any duties hereunder either
directly or by or through agents and attorneys and the Escrow Agent shall not be
responsible for any misconduct or negligence on the part of any agent or
attorney appointed with due care by it hereunder.

 

Section 3.04                             Disagreements.

 

If, at any time, (a) there shall exist any dispute with respect to the holding
or disposition of all or any portion of the Escrow Property or any other
obligations of the Escrow Agent hereunder or (b) the Escrow Agent is in doubt as
to the action to be taken hereunder, the Escrow Agent is authorized to retain
the Escrow Property until (i) such dispute or uncertainty shall be resolved to
the  satisfaction of the Escrow Agent in its sole discretion or (ii) the Escrow
Agent files an interpleader action in any court of competent jurisdiction, and
upon the filing thereof, the Escrow Agent shall be relieved of all liability as
to the Escrow Property and shall be entitled to recover attorneys’ fees,
expenses and other costs incurred in commencing and maintaining any such
interpleader action.  The Escrow Agent shall be entitled to act on any
agreement, court order or arbitration decision without further question, inquiry
or consent.  The Escrow Agent shall have no liability to the the Issuer or any
other person with respect to any suspension of performance or disbursement into
court, specifically including any liability or claimed liability that may arise,
or be alleged to have arisen, out of or as a result of any delay in the
disbursement of the Escrow Property or any delay in or with respect to any other
action required or requested of Escrow Agent.

 

Section 3.05                             Attachment of Escrow Property;
Compliance with Legal Orders.

 

In the event that any Escrow Property shall be attached, garnished or levied
upon by any court order, or the delivery thereof shall be stayed or enjoined by
an order of a court, or any order, judgment or decree shall be made or entered
by any court order affecting the Escrow Property, the Escrow Agent is hereby
expressly authorized, in its sole discretion, to respond as it deems appropriate
or to comply with all writs, orders or decrees so entered or issued, or which it
is advised by legal counsel of its own choosing is binding upon it, whether with
or without jurisdiction.  In the event that the Escrow Agent obeys or complies
with any such writ, order or decree, it shall not be liable to the Issuer or to
any other person, firm or corporation, should, such compliance notwithstanding,
such writ, order or decree be subsequently reversed, modified, annulled, set
aside or vacated.

 

Section 3.06                             Resignation.

 

Escrow Agent may resign and be discharged from the performance of its duties
hereunder at any time by giving ten (10) days written notice to the Issuer
specifying the date when such resignation shall take effect.  The Issuer shall
appoint a successor Escrow Agent hereunder prior to the effective date of
resignation.  The Escrow Agent shall transmit all records pertaining to the

 

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Escrow Property and shall pay all Escrow Property to the successor escrow agent,
after making copies of record the Escrow Agent deems advisable and after
deduction and payment to the Escrow Agent of all fees and expenses (including
court costs and attorneys’ fees and expenses) payable to, incurred by, or
expected to be incurred by the Escrow Agent in connection with the performance
of its duties and the exercise of its rights hereunder.  Upon delivery of the
Escrow Property to the successor escrow agent, the Escrow Agent shall have no
further duties, responsibilities or obligations hereunder.

 

Section 3.07                             Concerning the Trustee.

 

This Escrow Agreement has been accepted, executed and delivered by the Trustee
in its capacity as Trustee under and pursuant to the terms of each of the
Indentures.  The Trustee shall be entitled to all rights, privileges, immunities
and protections set forth in the Indentures in the acceptance, execution,
delivery and performance of this Escrow Agreement as though fully set forth
herein.

ARTICLE FOUR

 

MISCELLANEOUS

 

Section 4.01                             Merger, Consolidation.

 

Any entity into which the Escrow Agent may be merged or which it may be
consolidated, or any entity resulting from any merger, conversion or
consolidation to which the Escrow Agent shall be a party, or any entity
succeeding to all or substantially all the escrow or corporate trust business of
the Escrow Agent shall be the successor Escrow Agent hereunder without the
execution or filing of any paper or any further act on the part of any of the
parties hereto except where an instrument of transfer or assignment is required
by law to effect such succession, anything herein to the contrary
notwithstanding.

 

Section 4.02                             Escheat.

 

The parties hereto are aware that under applicable state law, property which is
presumed abandoned may under certain circumstances escheat to the appropriate
state.  The Escrow Agent shall have no liability to the Issuer, its heirs, legal
representatives, successors and assigns, or any other party, should any or all
of the Escrow Property be subject to escheat.

 

Section 4.03                             Notices.

 

Unless otherwise provided herein, all notices, requests and other communications
to any party hereunder shall be in writing (including facsimile and electronic
transmission in PDF format) and shall be given to such party, addressed to it,
at its address or facsimile number set forth below:

 

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If to the Issuer:

 

Steel Dynamics, Inc.

7575 West Jefferson Blvd.

Fort Wayne, Indiana 46804

Facsimile:  260 969 3587

Attention:  Theresa E. Wagler

Email: theresa.wagler@steeldynamics.com

 

with a copy to:

 

Barrett & McNagny LLP

215 East Berry Street

Fort Wayne, Indiana 46802

Facsimile:  260 423 8920

Attention:  Robert S. Walters

Email: rsw@barrettlaw.com

 

If to the Escrow Agent:

 

Wells Fargo Bank, National Association

10 South Wacker Drive, 13th Floor

Chicago, Illinois  60606

Facsimile:  (312) 726-2158

Email: Gregory.S.Clarke@wellsfargo.com

 

If to the Trustee:

 

Wells Fargo Bank, National Association

10 South Wacker Drive, 13th Floor

Chicago, Illinois  60606

Facsimile:  (312) 726-2158

Email: Gregory.S.Clarke@wellsfargo.com

 

 

Section 4.04          Governing Law.

 

This Escrow Agreement and the Escrow Agent’s appointment hereunder shall be
construed and enforced in accordance with the laws of the State of New York
applicable to agreements made and to be performed entirely within such state,
and without regard to conflicts of laws principles thereof.  This Escrow
Agreement shall inure to the benefit of the parties hereto and nothing in this
Escrow Agreement, express or implied, is intended to or shall confer upon any
other person any right, benefit or remedy of any nature whatsoever under or by
reason of this Escrow Agreement. The Escrow Agent may assign or transfer its
rights under this Escrow Agreement to any of its affiliates without the prior
written consent of any party hereto, provided that the Escrow Agent shall notify
the Issuer in writing of such assignment or transfer promptly

 

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following the effectiveness thereof.  For purposes of this Section, “affiliate”
means any Person that directly or indirectly controls, or is under common
control with, or is controlled by, the Escrow Agent, provided that “control”
(including its correlative meanings, “controlled by” and “under common control
with”) shall mean possession, directly or indirectly, of power to direct or
cause the direction of management or policies (whether through ownership of
securities or partnership or other ownership interests, by contract or
otherwise).

 

Section 4.05          Entire Escrow Agreement.

 

This Escrow Agreement sets forth the entire agreement and understanding of the
parties hereto related to the Escrow Property.  All prior and contemporaneous
negotiations and agreements between the parties hereto on the matter contained
in this Agreement are expressly merged into and superseded by this Agreement.

 

Section 4.06          Amendment.

 

This Escrow Agreement shall not be amended, in whole or in part except by a
written instrument signed by the Issuer, the Trustee, and the Escrow Agent. This
Escrow Agreement may not be modified orally or by electronic mail (other than in
PDF format).

 

Section 4.07          Waivers.

 

The failure of either party to this Escrow Agreement at any time to require
performance of any provision under this Escrow Agreement shall not affect the
right at a later time to enforce the same performance.  A waiver by either party
to this Escrow Agreement of any condition or breach of any term, covenant,
representation, or warranty contained in this Escrow Agreement, in one or more
instances, shall not be construed as a further or continuing waiver of any such
condition or breach or a waiver of any other condition or breach of any other
term, covenant, representation, or warranty contained in this Escrow Agreement.

 

Section 4.08          Headings.

 

The section headings herein are for convenience only and shall not affect the
construction hereof.

 

Section 4.09          Counterparts.

 

This Escrow Agreement may be executed in two or more counterparts, each of which
shall be deemed to be an original and all of which together shall constitute one
and the same agreement. The exchange of copies of this Escrow Agreement and of
signature pages by facsimile or PDF transmission shall constitute effective
execution and delivery of this Escrow Agreement as to the parties hereto and may
be used in lieu of the original Escrow Agreement for all purposes.  Signatures
of the parties hereto transmitted by facsimile or PDF shall be deemed to be
their original signatures for all purposes.

 

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Section 4.10          Severability.

 

In case any provision of this Escrow Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

 

Section 4.11          Force Majeure.

 

In no event shall the Escrow Agent be responsible or liable for any failure or
delay in the performance of its obligations hereunder arising out of or caused,
directly or indirectly, by forces beyond its control, including, without
limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil
or military disturbances, nuclear or natural catastrophes or acts of God, and
interruptions, loss or malfunctions of utilities, communications or computer
(software and hardware) services. The Escrow Agent shall use shall use
commercially reasonable efforts, consistent with accepted practices in the
banking industry, to resume performance as soon as practicable under the
circumstances.

 

Section 4.12          Venue; Consent to Jurisdiction.

 

(a)           Any legal suit, action or proceeding arising out of or based upon
this Escrow Agreement or the transactions contemplated hereby (“Related
Proceedings”) may be instituted in the federal courts of the United States of
America located in the City and County of New York or the courts of the State of
New York in each case located in the City and County of New York (collectively,
the “Specified Courts”), and each party irrevocably submits to the exclusive
jurisdiction (except for suits, actions, or proceedings instituted in regard to
the enforcement of a judgment of any Specified Court in a Related Proceeding, as
to which such jurisdiction is non-exclusive) of the Specified Courts in any
Related Proceeding.  Service of any process, summons, notice or document by mail
to such party’s address set forth above shall be effective service of process
for any Related Proceeding brought in any Specified Court.  The parties
irrevocably and unconditionally waive any objection to the laying of venue of
any Specified Proceeding in the Specified Courts and irrevocably and
unconditionally waive and agree not to plead or claim in any Specified Court
that any Related Proceeding brought in any Specified Court has been brought in
an inconvenient forum.

 

(b)           EACH PARTY HERETO, TO THE EXTENT PERMITTED BY LAW, KNOWINGLY,
VOLUNTARILY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT AND
THE TRANSACTIONS CONTEMPLATED HEREBY.  THIS WAIVER APPLIES TO ANY ACTION OR
LEGAL PROCEEDING, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.

 

Section 4.13          U.S.A. Patriot Act.

 

The parties hereto acknowledge that in accordance with Section 326 of the U.S.A.
Patriot Act, the Escrow Agent, in order to help fight the funding of terrorism
and prevent money laundering, is required to obtain, verify, and record
information that identifies each person or legal entity that establishes a
relationship or opens an account with the Escrow Agent.  The parties to this
Escrow Agreement agree that they will provide the Escrow Agent with such

 

11

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information as it may request in order for the Escrow Agent to satisfy the
requirements of the U.S.A. Patriot Act.

 

Section 4.14          Publication; Disclosure.  By executing this Escrow
Agreement, the Issuer, the Trustee and the Escrow Agent acknowledge that this
Escrow Agreement (including related attachments) contains certain information
that is sensitive and confidential in nature and agree that such information
needs to be protected from improper disclosure, including the publication or
dissemination of this Escrow Agreement and related information to individuals or
entities not a party to this Escrow Agreement.  The Issuer further agrees to
take reasonable measures to mitigate any risks associated with the publication
or disclosure of this Escrow Agreement and information contained therein,
including, without limitation, the redaction of the manual signatures of the
signatories to this Escrow Agreement, Exhibit D or, in the alternative,
publishing a conformed copy of this Escrow Agreement.  If the Issuer must
disclose or publish this Escrow Agreement or information contained therein
pursuant to any regulatory, statutory, or governmental requirement, as well as
any judicial, or administrative order, subpoena or discovery request, it shall
notify in writing the other party and the Escrow Agent at the time of execution
of this Escrow Agreement of the legal requirement to do so.  If Issuer becomes
aware of any threatened or actual unauthorized disclosure, publication or use of
this Escrow Agreement, Issuer shall promptly notify in writing the Trustee and
the Escrow Agent and shall be liable for any unauthorized release or disclosure.

 

[Signature pages to follow]

 

12

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IN WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement to be
executed by their respective officers, hereunto duly authorized, as of the day
and year first above written.

 

 

STEEL DYNAMICS, INC.

 

 

 

By:

/s/ Theresa E. Wagler

 

Name:

Theresa E. Wagler

 

Title:

Executive Vice President

 

[Signature page to Escrow Agreement]

 

--------------------------------------------------------------------------------

 

 

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Escrow Agent

 

 

 

By:

/s/ Stefan Victory

 

Name:

Stefan Victory

 

Title:

Vice President

 

 

 

 

 

 

 

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee

 

 

 

 

By:

/s/ Stefan Victory

 

Name:

Stefan Victory

 

Title:

Vice President

 

[Signature page to Escrow Agreement]

 

--------------------------------------------------------------------------------

 

EXHIBIT A

 

WELLS FARGO BANK, NATIONAL ASSOCIATION

10 South Wacker Drive, 13th Floor
Chicago, Illinois 60606

 

Steel Dynamics, Inc.

7575 West Jefferson Blvd.

Fort Wayne, Indiana 46804

Facsimile:  260 969 3587

Attention:  Theresa E. Wagler

 

Re:  Receipt of Escrow Amount

 

Ladies and Gentlemen:

Wells Fargo Bank, National Association, as escrow agent (the “Escrow Agent”)
under the Escrow Agreement, dated September 9, 2014 (the “Escrow Agreement”),
among Steel Dynamics, Inc. (the “Issuer”), Wells Fargo Bank, National
Association, as trustee, and the Escrow Agent, relating to the Issuer’s 5.125%
Senior Notes due 2021 and 5.500% Senior Notes due 2024, hereby acknowledges
receipt pursuant to Section 1.02 of the Escrow Agreement of the aggregate amount
of $1,200,000,000.00 in the form of cash by wire transfer in immediately
available funds, which amount represents the initial deposit of the Escrow
Property under Section 1.02 of the Escrow Agreement.  Such Escrow Property has
been deposited in the Escrow Account, which has been established as set forth in
the Escrow Agreement.

 

 

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Escrow Agent

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

Ex. A - 1

--------------------------------------------------------------------------------

 

EXHIBIT B

 

CONSUMMATION RELEASE CERTIFICATE

 

Reference is made to the Escrow Agreement, dated September 9, 2014 (the “Escrow
Agreement”), by and among Steel Dynamics, Inc. (the “Issuer”), Wells Fargo Bank,
National Association, as trustee under each of the Indentures (the “Trustee”),
and Wells Fargo Bank, National Association, as escrow agent (“Escrow Agent”). 
Capitalized terms used but not defined herein have the meanings assigned to them
in the Escrow Agreement.

 

The undersigned                            , in his or her capacity as
                                of the Issuer, does hereby certify on behalf of
the Issuer that:

 

(1)           the Acquisition will be consummated on substantially the terms
described in the Preliminary Offering Memorandum and the Final Offering
Memorandum, substantially concurrently with the release of the Escrow Property
and the Escrow Property will be applied in the manner described under the
caption “Use of Proceeds” in the Preliminary Offering Memorandum and the Final
Offering Memorandum; and

 

(2)           no Default or Event of Default has occurred and is continuing
under, with respect to the 2021 Notes, the 2021 Notes Indenture and, with
respect to the 2024 Notes, the 2024 Notes Indenture.

 

Pursuant to the Escrow Agreement, the Issuer hereby authorizes and directs
release by the Escrow Agent of the Escrow Property as follows:

 

(a)           $16,500,000.00, representing the sum of 1.375% of the aggregate
principal amount of the Notes in immediately available funds as follows:

 

Payee:

 

Wire Instructions:

 

 

 

Goldman Sachs & Co.

 

Bank Name:
ABA Number:
Account Name: Goldman Sachs & Co.
Account Number:
Attn:
Ref: Steel Dynamics, Inc.

 

(b)           after making the transfer described in paragraph (a) above, an
amount equal to all amounts remaining in the Escrow Account, payable to the
Issuer by wire transfer of immediately available funds as follows:

 

Payee:

 

Wire Instructions:

 

 

 

Steel Dynamics, Inc.

 

Bank Name:
ABA Number:
Account Name: Steel Dynamics, Inc.
Account Number:
Attn:
Ref:

 

[Remainder of page intentionally left blank]

 

Ex. B - 1

--------------------------------------------------------------------------------

 

 

STEEL DYNAMICS, INC.

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

Ex. B - 2

--------------------------------------------------------------------------------

 

ACKNOWLEDGMENT OF RELEASE

 

The Escrow Agent hereby confirms to the Issuer that the Escrow Property has been
released by it in accordance with the Consummation Release Certificate.

 

 

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Escrow Agent

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

Ex. B - 3

--------------------------------------------------------------------------------

 

EXHIBIT C

 

REDEMPTION RELEASE CERTIFICATE

 

Reference is made to the Escrow Agreement, dated September 9, 2014 (the “Escrow
Agreement”), by and among Steel Dynamics, Inc. (the “Issuer”), Wells Fargo Bank,
National Association, as trustee under each of the Indentures (the “Trustee”),
and Wells Fargo Bank, National Association, as escrow agent (“Escrow Agent”). 
Capitalized terms used but not defined herein have the meanings assigned to them
in the Escrow Agreement.

 

The undersigned                                      , in his or her capacity as
                                      of the Issuer, does hereby certify on
behalf of the Issuer that [the Acquisition Agreement has been terminated prior
to April 18, 2015][the Acquisition has not been consummated, and is not expected
to be consummated, on or prior to April 18, 2015][the Acquisition has not been
consummated, but may be consummated on or prior to April 18, 2015] and the
Issuer is required to redeem each series of Notes pursuant to Section [3.10] of
each of the Indentures.

 

Pursuant to the Escrow Agreement, the Issuer hereby authorizes and directs
release by the Escrow Agent of the Escrow Property as follows:

 

(a)                                 $[·], representing 100.000% of the aggregate
principal amount of each series of Notes, payable to the Trustee by wire
transfer (or internal transfer, if applicable) of immediately available funds as
follows:

 

Payee:

 

Wire Instructions:

 

 

 

Wells Fargo Bank, National Association

 

Wells Fargo Bank, N.A.

ABA No.:

Account No.:

Attention:

Reference:

 

(b)                                 after making the transfers described in
paragraph (a) above, an amount equal to all amounts remaining in the Escrow
Account, payable to the Issuer by wire transfer of immediately available funds
as follows:

 

Payee:

 

Wire Instructions:

 

 

 

Steel Dynamics, Inc.

 

Bank Name:

ABA Number:

Account Name: Steel Dynamics, Inc.

Account Number:

Attn:

Ref:

 

Notwithstanding the foregoing, in the event the certification above indicates
that the Acquisition may be consummated on or prior to April 18, 2015, this
Redemption Release Certificate may be revoked by delivery of a Consummation
Release Certificate on or prior to April 18, 2015.

 

Ex. C - 1

--------------------------------------------------------------------------------

 

 

STEEL DYNAMICS, INC.

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

Ex. C - 2

--------------------------------------------------------------------------------

 

ACKNOWLEDGMENT OF RELEASE

 

The Escrow Agent hereby confirms to the Issuer that the Escrow Property has been
released by it in accordance with the Redemption Release Certificate.

 

 

WELLS FARGO BANK, NATIONAL ASSOCIATION, as

 

Escrow Agent

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

Ex. C - 3

--------------------------------------------------------------------------------

 

EXHIBIT D

 

Steel Dynamics, Inc. certifies that the names, titles, telephone numbers, e-mail
addresses and specimen signatures set forth in Parts I and II of this Exhibit D
identify the persons authorized to provide direction and initiate or confirm
transactions, including funds transfer instructions, on behalf of Steel
Dynamics, Inc., and that the option checked in Part III of this Exhibit D is the
security procedure selected by Steel Dynamics, Inc. for use in verifying that a
funds transfer instruction received by the Escrow Agent is that of Steel
Dynamics, Inc.

 

Steel Dynamics, Inc. has reviewed each of the security procedures and has
determined that the option checked in Part III of this Exhibit D best meets its
requirements; given the size, type and frequency of the instructions it will
issue to the Escrow Agent.  By selecting the security procedure specified in
Part III of this Exhibit D, Steel Dynamics, Inc. acknowledges that it has
elected to not use the other security procedures described and agrees to be
bound by any funds transfer instruction, whether or not authorized, issued in
its name and accepted by the Escrow Agent in compliance with the particular
security procedure chosen by Steel Dynamics, Inc.

 

NOTICE:  The security procedure selected by Steel Dynamics, Inc. will not be
used to detect errors in the funds transfer instructions given by Steel
Dynamics, Inc.  If a funds transfer instruction describes the beneficiary of the
payment inconsistently by name and account number, payment may be made on the
basis of the account number even if it identifies a person different from the
named beneficiary.  If a funds transfer instruction describes a participating
financial institution inconsistently by name and identification number, the
identification number may be relied upon as the proper identification of the
financial institution.  Therefore, it is important that Steel Dynamics, Inc.
take such steps as it deems prudent to ensure that there are no such
inconsistencies in the funds transfer instructions it sends to the Escrow Agent.

 

Part I

 

Name, Title, Telephone Number, Electronic Mail (“e-mail”) Address and Specimen
Signature for person(s) designated to provide direction, including but not
limited to funds transfer instructions, and to otherwise act on behalf of Steel
Dynamics, Inc.

 

Name

 

Title

 

Telephone Number

 

E-mail Address

 

Specimen Signature

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Theresa E. Wagler

 

EVP and CFO

 

260-969-3567

 

theresa.wagler@steeldynamics.com

 

/s/ Theresa E. Wagler

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Richard A. Poinsatte

 

VP and Treasurer

 

260-969-3560

 

rick.poinsatte@steeldynamics.com

 

/s/ Richard A. Poinsatte

 

Ex. D - 1

--------------------------------------------------------------------------------

 

Part II

 

Name, Title, Telephone Number and E-mail Address for

person(s) designated to confirm funds transfer instructions

 

Name

 

Title

 

Telephone Number

 

E-mail Address

 

 

 

 

 

 

 

Theresa E. Wagler

 

EVP and CFO

 

260-969-3567

 

theresa.wagler@steeldynamics.com

 

 

 

 

 

 

 

Richard A. Poinsatte

 

VP and Treasurer

 

260-969-3560

 

rick.poinsatte@steeldynamics.com

 

Ex. D - 2

--------------------------------------------------------------------------------

 

Part III

 

Means for delivery of instructions and/or confirmations

 

The security procedure to be used with respect to funds transfer instructions is
checked below:

 

o                                    Option 1.  Confirmation by telephone
call-back.  The Escrow Agent shall confirm funds transfer instructions by
telephone call-back to a person at the telephone number designated on Part II
above.  The person confirming the funds transfer instruction shall be a person
other than the person from whom the funds transfer instruction was received,
unless only one person is designated in both Parts I and II of this Exhibit D.

o            CHECK box, if applicable:

If the Escrow Agent is unable to obtain confirmation by telephone call-back, the
Escrow Agent may, at its discretion, confirm by e-mail, as described in Option
2.

 

x                                  Option 2.  Confirmation by e-mail.  The
Escrow Agent shall confirm funds transfer instructions by e-mail to a person at
the e-mail address specified for such person in Part II of this Exhibit D.  The
person confirming the funds transfer instruction shall be a person other than
the person from whom the funds transfer instruction was received, unless only
one person is designated in both Parts I and II of this Exhibit D.  Steel
Dynamics, Inc. understands the risks associated with communicating sensitive
matters, including time sensitive matters, by e-mail.  Steel Dynamics, Inc.
further acknowledges that instructions and data sent by e-mail may be less
confidential or secure than instructions or data transmitted by other methods.
The Escrow Agent shall not be liable for any loss of the confidentiality of
instructions and data prior to receipt by the Escrow Agent.

x          CHECK box, if applicable:

If the Escrow Agent is unable to obtain confirmation by e-mail, the Escrow Agent
may, at its discretion, confirm by telephone call-back, as described in Option
1.

 

o                                    Option 3. Delivery of funds transfer
instructions by password protected file transfer system only - no confirmation. 
The Escrow Agent offers the option to deliver funds transfer instructions
through a password protected file transfer system. If Steel Dynamics, Inc.
wishes to use the password protected file transfer system, further instructions
will be provided by the Escrow Agent.  If Steel Dynamics, Inc. chooses this
Option 3, it agrees that no further confirmation of funds transfer instructions
will be performed by the Escrow Agent.

 

o                                    Option 4.  Delivery of funds transfer
instructions by password protected file transfer system with confirmation.  Same
as Option 3 above, but the Escrow Agent shall confirm funds transfer
instructions by o telephone call-back or o e-mail (must check at least one, may
check both) to a person at the telephone number or e-mail address designated on
Part II above.  By checking a box in the prior sentence, the party shall be
deemed to have agreed to the terms of such confirmation option as more fully
described in Option 1 and Option 2 above.

 

Dated this 9th day of September, 2014.

 

 

 

By

/s/ Richard A. Poinsatte

 

Name:

Richard A. Poinsatte

 

Title:

Vice President

 

 

Ex. D - 3

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EXHIBIT E

 

AGENCY AND CUSTODY ACCOUNT DIRECTION
FOR CASH BALANCES

 

Direction to use the following Wells Fargo Money Market Deposit Accounts for
Cash Balances for the escrow account or accounts (the “Account”) established
under the Escrow Agreement to which this Exhibit E is attached.

 

You are hereby directed to deposit, as indicated below, or as I shall direct
further in writing from time to time, all cash in the Account(s) in the
following investment:

 

x Uninvested Cash

 

I understand that amounts on deposit uninvested are insured, subject to the
applicable rules and regulations of the Federal Deposit Insurance Corporation
(FDIC), in the basic FDIC insurance amount of $250,000 per depositor, per
insured bank. This includes principal and accrued interest up to a total of
$250,000.   The undersigned acknowledges that he has full power to direct
investments of the Account.

 

I acknowledge that I have full power to direct investments of the Account.

 

The undersigned understands that it may change this direction at any time and
that it shall continue in effect until revoked or modified by the undersigned by
written notice to you.

 

 

 

STEEL DYNAMICS, INC.

 

 

 

 

 

By:

/s/ Richard A. Poinsatte

 

Name:

Richard A. Poinsatte

 

Title:

Vice President

 

 

 

 

September 9, 2014

 

 

Ex. E - 1

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