Exhibit 99.2
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Pledge Agreement") is entered into as of
March 27, 2002 by and among WOLVERINE TUBE, INC., a Delaware corporation (the
"Company"), its U.S. Subsidiaries identified as U.S. Subsidiary Borrowers on the
signature pages to the Credit Agreement referred to below and any additional
U.S. Subsidiaries of the Company which become Borrowers thereunder in accordance
with the terms thereof (together with the Company, the "U.S. Borrowers")
(hereinafter the U.S. Borrowers are collectively referred to as the "Pledgors"
and individually as a "Pledgor"), and WACHOVIA BANK, N.A., in its capacity as
the administrative agent under the Credit Agreement referred to below (in such
capacity, the "Administrative Agent" or the "Agent" and together with the
Canadian Agent, the "Agents").
RECITALS
WHEREAS, pursuant to that certain Credit Agreement dated as of the
date hereof (as amended, modified, extended, renewed or replaced from time to
time, the "Credit Agreement"), among the Borrowers, the Lenders party thereto
from time to time, the Agent and Congress Financial Corporation (Canada), as the
Canadian Agent, the U.S. Lenders have agreed to make U.S. Revolving Loans and to
issue or participate in U.S. Letters of Credit with respect to the U.S.
Borrowers and the Canadian Lenders have agreed to make Canadian Revolving Loans
and to issue or participate in Letters of Credit or Bankers' Acceptances with
respect to the Canadian Borrowers all pursuant to the Credit Agreement upon the
terms and subject to the conditions set forth therein;
WHEREAS, pursuant to a Guaranty Agreement dated as of the date hereof
(as amended, modified, extended, renewed or replaced from time to time, the
"Guaranty Agreement") executed by the U.S. Borrowers, such U.S. Borrowers have
agreed to guarantee the payment of the Canadian Obligations; and
WHEREAS, it is a condition precedent to the effectiveness of the
Credit Agreement, the obligation of the U.S. Lenders to make U.S. Revolving
Loans or to issue or participate in U.S. Letters of Credit under the Credit
Agreement, the Canadian Lenders to make Canadian Revolving Loans or to issue or
participate in Canadian Letters of Credit or Bankers' Acceptances under the
Credit Agreement that the Obligors shall have executed and delivered this Pledge
Agreement to the Agent for the benefit of the Lenders.
NOW, THEREFORE, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Definitions. Unless otherwise defined herein, capitalized terms
used herein shall have the meanings ascribed to such terms in the Credit
Agreement, and the following terms which are defined in the Uniform Commercial
Code from time to time in effect in the State of North Carolina (the "UCC") are
used herein as so defined: Control, Entitlement Order, Securities Intermediary,
Security Account and Security Entitlement. For purposes of this Pledge
Agreement, (a) the term "Lender" shall include any Affiliate of any Lender which
has entered
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into a Hedging Agreement with any Pledgor (to the extent the obligations of such
Pledgor thereunder constitute Pledgor Obligations (as defined in Section 3
hereof), (b) the term "Domestic Subsidiary" shall mean any Subsidiary that is
organized and existing under the laws of the United States or any state or
commonwealth thereof or under the laws of the District of Columbia and (c) the
term "Foreign Subsidiary" shall mean any Subsidiary that is not a Domestic
Subsidiary.
2. Pledge and Grant of Security Interest. To secure the prompt payment
and performance in full when due, whether by lapse of time or otherwise, of the
Pledgor Obligations (as defined in Section 3 hereof), each Pledgor hereby
pledges and assigns to the Agent, for the benefit of the Lenders, and grants to
the Agent, for the benefit of the Lenders, a continuing security interest in any
and all right, title and interest of such Pledgor in and to the following,
whether now owned or existing or owned, acquired, or arising hereafter
(collectively, the "Pledged Collateral") provided, that this Pledge Agreement
shall not constitute a pledge or an assignment of, or a grant of a security
interest in or lien on the stock of Small Tube Europe B.V. to the extent that
such pledge, assignment or grant of a security interest or lien is prohibited by
the terms of any contract or agreement or requires written consent (provided,
however that each Obligor shall use its best efforts to secure such written
consent):
(a) Pledged Capital Stock. 65% (or such greater percentage
that may be permitted at any date after the date hereof, without such
pledge being treated as an indirect pledge, pursuant to Treas. Reg.
Section 1.956-2(c)(2)), as amended or replaced from time to time, or
100% if such regulation is repealed or no longer in effect and no
comparable successor law or regulation is enacted or promulgated, but
in each case limited to the full amount owned by such Pledgor) of each
class of the issued and outstanding Capital Stock entitled to vote
(within the meaning of Treas. Reg. Section 1.956-2(c)(2)) ("Voting
Equity") and 100% (or, if less, the full amount owned by such Pledgor)
of each class of the issued and outstanding Capital Stock not entitled
to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2))
("Non-Voting Equity") of each Foreign Subsidiary set forth on Schedule
2(a) attached hereto (but only to the extent that the pledge of such
Non-Voting Equity would not cause the Obligations to be treated as
"United States property" of such Foreign Subsidiary within the meaning
of Treas. Reg. Section 1.956-2), in each case together with the
certificates (or other agreements or instruments), if any,
representing such Capital Stock, and all options and other rights,
contractual or otherwise, with respect thereto (collectively, together
with the Capital Stock described in Section 2(b) and 2(c) below, the
"Pledged Capital Stock"), including, but not limited to, the
following:
(y) subject to the percentage restrictions described
above, all shares, securities, membership interests or other
equity interests representing a dividend on any of the Pledged
Capital Stock, or representing a distribution or return of
capital upon or in respect of the Pledged Capital Stock, or
resulting from a stock split, revision, reclassification or
other exchange therefor, and any subscriptions, warrants,
rights or options issued to the holder of, or otherwise in
respect of, the Pledged Capital Stock; and
(z) without affecting the obligations of the Pledgors
under any provision prohibiting such action hereunder or under
the Credit Agreement, in the
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event of any consolidation or merger involving the issuer of
any Pledged Capital Stock and in which such issuer is not the
surviving entity, all shares of each class of the Capital
Stock of the successor entity formed by or resulting from such
consolidation or merger.
(b) Additional Interests. 65% (or such greater percentage that
may be permitted at any date after the date hereof, without such
pledge being treated as an indirect pledge, pursuant to Treas. Reg.
Section 1.956-2(c)(2), as amended or replaced from time to time, or
100% if such regulation is repealed or no longer in effect and no
comparable successor law or regulation is enacted or promulgated, but
in each case limited to the full amount owned by such Pledgor) of the
Voting Equity and 100% (or, if less, the full amount owned by such
Pledgor) of the Non-Voting Equity of any Person which hereafter
becomes a Foreign Subsidiary (but only to the extent that the pledge
of such Non-Voting Equity would not cause the Obligations to be
treated as "United States property" of such Foreign Subsidiary within
the meaning of Treas. Reg. Section 1.956-2), including, without
limitation, the certificates (or other agreements or instruments)
representing such Capital Stock.
(c) Other Equity Interests. Subject to the percentage
restrictions described above, any and all other Capital Stock owned by
any Pledgor in any Domestic Subsidiary or any Foreign Subsidiary.
(d) Proceeds. All proceeds and products of the foregoing,
however and whenever acquired and in whatever form.
Without limiting the generality of the foregoing, it is hereby
specifically understood and agreed that a Pledgor may from time to time
hereafter pledge and deliver additional shares of stock or other interests to
the Agent as collateral security for the Pledgor Obligations. Upon such pledge
and delivery to the Agent, such additional shares of stock or other interests
shall be deemed to be part of the Pledged Collateral of such Pledgor and shall
be subject to the terms of this Pledge Agreement whether or not Schedule 2(a) is
amended to refer to such additional shares.
3. Security for Pledgor Obligations. The security interest created
hereby in the Pledged Collateral of each Pledgor constitutes continuing
collateral security for all of the following, whether now existing or hereafter
incurred (the "Pledgor Obligations"): (a) all of the Obligations, howsoever
evidenced, created, incurred or acquired, whether primary, secondary, direct,
contingent, or joint and several and (b) all expenses and charges, legal and
otherwise, reasonably incurred by the Agent and/or the Lenders in collecting or
enforcing any Obligation or in realizing on or protecting any security therefor,
including without limitation the security granted hereunder.
4. Delivery of the Pledged Collateral~ Perfection of Security
Interest. Each Pledgor hereby agrees that:
(a) Delivery of Certificate. Each Pledgor shall deliver to the
Agent (i) simultaneously with or prior to the execution and delivery of
this Pledge Agreement, all certificates representing the Pledged
Capital Stock of such Pledgor, except with respect to
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the certificates representing the Pledged Capital Stock pledged by STPC
Holding, Inc. of Small Tube Europe B.V. which shall be delivered within
sixty (60) days of the date hereof unless Small Tube Europe B.V. has
been merged or dissolved in accordance with the Credit Documents prior
to such date, and (ii) promptly upon the receipt thereof by or on
behalf of a Pledgor, all other certificates and instruments
constituting Pledged Collateral of a Pledgor. Prior to delivery to the
Agent, all such certificates and instruments constituting Pledged
Collateral of a Pledgor shall be held in trust by such Pledgor for the
benefit of the Agent pursuant hereto. All such certificates shall be
delivered in suitable form for transfer by delivery or shall be
accompanied by duly executed instruments of transfer or assignment in
blank, substantially in the form provided in Exhibit 4(a) attached
hereto.
(b) Additional Securities. If such Pledgor shall receive by
virtue of its being or having been the owner of any Pledged Collateral,
any (i) certificate, including without limitation, any certificate
representing a dividend or distribution in connection with any increase
or reduction of capital, reclassification, merger, consolidation, sale
of assets, combination of shares or membership or equity interests,
stock splits, spin-off or split-off, promissory notes or other
instrument; (ii) option or right, whether as an addition to,
substitution for, or an exchange for, any Pledged Collateral or
otherwise; (iii) dividends payable in securities; or (iv) distributions
of securities or other equity interests in connection with a partial or
total liquidation, dissolution or reduction of capital, capital surplus
or paid-in surplus, then such Pledgor shall receive such certificate,
instrument, option, right or distribution in trust for the benefit of
the Agent, shall segregate it from such Pledgor's other property and
shall deliver it forthwith to the Agent in the exact form received
together with any necessary endorsement and/or appropriate stock power
duly executed in blank, substantially in the form provided in Exhibit
4(a), to be held by the Agent as Pledged Collateral and as further
collateral security for the Pledgor Obligations.
(c) Financing Statements. Each Pledgor shall execute and
deliver to the Agent such UCC or other applicable financing statements
as may be reasonably requested by the Agent in order to perfect and
protect the security interest created hereby in the Pledged Collateral
of such Pledgor.
(d) Provisions Relating to Securities Entitlements and
Securities Accounts. With respect to any Pledged Collateral consisting
of a Securities Entitlement or held in a Securities Account, (a) the
applicable Pledgor and the applicable Securities Intermediary shall
enter into an agreement with the Agent granting Control to the Agent
over such Pledged Collateral, such agreement to be in form and
substance satisfactory to the Agent and (b) the Agent shall be
entitled, upon the occurrence and during the continuance of a Default
or an Event of Default, to notify the applicable Securities
Intermediary that it should follow the Entitlement Orders of the Agent
and no longer follow the Entitlement Orders of the applicable Pledgor.
Upon receipt by a Pledgor of notice from a Securities Intermediary of
its intent to terminate the Securities Account of such Pledgor held by
such Securities Intermediary, prior to the termination of such
Securities Account the Pledged Collateral in such Securities Account
shall be (i) transferred to a new Securities Account which is subject
to a control agreement as provided above or (ii) transferred to an
account held by the Agent (in which it will be held until a new
Securities Account is established).
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5. Representations and Warranties. Each Pledgor hereby represents and
warrants to the Agent, for the benefit of the Lenders, that so long as any of
the Pledgor Obligations remain outstanding or any Credit Document or Hedging
Agreement between any Credit Party and any Lender is in effect or any Letter of
Credit shall remain outstanding, and until all of the Commitments shall have
been terminated:
(a) Authorization of Pledged Capital Stock. The Pledged
Capital Stock is duly authorized and validly issued, is fully paid and
nonassessable and is not subject to the preemptive rights of any
Person. All other shares of Capital Stock constituting Pledged
Collateral will be duly authorized and validly issued, fully paid and
nonassessable and not subject to the preemptive rights of any Person.
(b) Title. Each Pledgor has good and indefeasible title to the
Pledged Collateral of such Pledgor and will at all times be the legal
and beneficial owner of such Pledged Collateral free and clear of any
Lien, other than Permitted Liens. There exists no "adverse claim"
within the meaning of Section 8-102 of the Uniform Commercial Code as
in effect in the State of North Carolina (the "UCC") with respect to
the Pledged Capital Stock of such Pledgor.
(c) Exercising of Rights. The exercise by the Agent of its
rights and remedies hereunder will not violate any law or governmental
regulation or any material contractual restriction binding on or
affecting a Pledgor or any of its property.
(d) Pledgor's Authority. No authorization, approval or action
by, and no notice or filing with any Governmental Authority, the issuer
of any Pledged Capital Stock or third party is required either (i) for
the pledge made by a Pledgor or for the granting of the security
interest by a Pledgor pursuant to this Pledge Agreement or (ii) for the
exercise by the Agent or the Lenders of their rights and remedies
hereunder (except as may be required by laws affecting the offering and
sale of the Pledged Capital Stock).
(e) Security Interest/Priority. This Pledge Agreement creates
a valid security interest in favor of the Agent for the benefit of the
Lenders, in the Pledged Collateral. The taking possession by the Agent
of the certificates (if any) representing the Pledged Capital Stock and
all other certificates and instruments constituting Pledged Collateral
will perfect and establish the first priority of the Agent's security
interest in all certificated Pledged Capital Stock and such
certificates and instruments. Upon the filing of UCC financing
statements in the appropriate filing office in the jurisdiction of each
Pledgor's formation, the Agent shall have a first priority perfected
security interest in all uncertificated Pledged Capital Stock
consisting of partnership or limited liability company interests that
do not constitute a security pursuant to Section 8-103(c) of the UCC.
With respect to any Pledged Collateral consisting of a Securities
Entitlement or held in a Securities Account, upon execution and
delivery by the applicable Pledgor, the applicable Securities
Intermediary and the Agent of an agreement granting Control to the
Agent over such Pledged Collateral, the Agent shall have a first
priority perfected security interest in such Pledged Collateral. Except
as set forth in this Section, no action is necessary to perfect or
otherwise protect such security interest.
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(f) No Other Capital Stock. Except as set forth on Schedule
2(a) attached hereto, no Pledgor owns any Capital Stock of the Company
or any of its Subsidiaries.
(g) Partnership and Limited Liability Company Interests. Except
as previously disclosed in writing to the Agent, none of the Pledged
Capital Stock consisting of partnership or limited liability company
interests (i) is dealt in or traded on a securities exchange or in a
securities market, (ii) by its terms expressly provides that it is a
security governed by Article 8 of the UCC, (iii) is an investment
company security, (iv) is held in a securities account or (v)
constitutes a "security" or a "financial asset" as such terms are
defined in Article 8 of the UCC.
6. Covenants. Each Pledgor hereby covenants, that so long as any of
the Pledgor Obligations remain outstanding or any Credit Document or Hedging
Agreement between any Credit Party and any Lender is in effect or any Letter of
Credit shall remain outstanding, and until all of the Commitments shall have
been terminated, such Pledgor shall:
(a) Books and Records. Mark its books and records (and shall
cause the issuer of the Pledged Capital Stock of such Pledgor to mark
its books and records) to reflect the security interest granted to the
Agent, for the benefit of the Lenders, pursuant to this Pledge
Agreement.
(b) Defense of Title. Warrant and defend title to and
ownership of the Pledged Collateral of such Pledgor at its own expense
against the claims and demands of all other parties claiming an
interest therein, keep the Pledged Collateral free from all Liens,
except for Permitted Liens, and not sell, exchange, transfer, assign,
lease or otherwise dispose of Pledged Collateral of such Pledgor or any
interest therein, except as permitted under the Credit Agreement and
the other Credit Documents.
(c) Further Assurances. Promptly execute and deliver at its
expense all further instruments and documents and take all further
action that may be necessary and desirable or that the Agent may
reasonably request in order to (i) perfect and protect the security
interest created hereby in the Pledged Collateral of such Pledgor
(including, without limitation, the execution and filing of UCC
financing statements and any and all action necessary to satisfy the
Agent that the Agent has obtained a first priority perfected security
interest in all Pledged Capital Stock); (ii) enable the Agent to
exercise and enforce its rights and remedies hereunder in respect of
the Pledged Collateral of such Pledgor; and (iii) otherwise effect the
purposes of this Pledge Agreement, including, without limitation and
if requested by the Agent, delivering to the Agent irrevocable proxies
in respect of the Pledged Collateral of such Pledgor.
(d) Amendments. Not make or consent to any amendment or other
modification or waiver with respect to any of the Pledged Collateral of
such Pledgor or enter into any agreement or allow to exist any
restriction with respect to any of the Pledged Collateral of such
Pledgor other than pursuant hereto or as may be permitted under the
Credit Agreement.
(e) Compliance with Securities Laws. File all reports and other
information now or hereafter required to be filed by such Pledgor with
the United States Securities and
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Exchange Commission and any other state, federal or foreign agency in
connection with the ownership of the Pledged Collateral of such
Pledgor.
(f) Issuance or Acquisition of Capital Stock. Not without
executing and delivering, or causing to be executed and delivered, to
the Agent such agreements, documents and instruments as the Agent may
reasonably require, issue or acquire any Capital Stock consisting of an
interest in a partnership or a limited liability company that (i) is
dealt in or traded on a securities exchange or in a securities market,
(ii) by its terms expressly provides that it is a security governed by
Article 8 of the UCC, (iii) is an investment company security, (iv) is
held in a securities account or (v) constitutes a "security" or a
"financial asset" as such terms are defined in Article 8 of the UCC.
7. Performance of Obligations: Advances by Agent. On failure of any
Pledgor to perform any of the covenants and agreements contained herein, the
Agent may, at its sole option and in its sole discretion, perform or cause to be
performed the same and in so doing may expend such sums as the Agent may
reasonably deem advisable in the performance thereof, including, without
limitation, the payment of any insurance premiums, the payment of any taxes, a
payment to obtain a release of a Lien or potential Lien, expenditures made in
defending against any adverse claim and all other expenditures which the Agent
may make for the protection of the security hereof or which may be compelled to
make by operation of law. All such sums and amounts so expended shall be
repayable by the Pledgors on a joint and several basis promptly upon timely
notice thereof and demand therefor, shall constitute additional Pledgor
Obligations and shall bear interest from the date said amounts are expended at
the default rate set forth in Section 4.2 of the Credit Agreement. No such
performance of any covenant or agreement by the Agent on behalf of any Pledgor,
and no such advance or expenditure therefor, shall relieve the Pledgors of any
default under the terms of this Pledge Agreement, the other Credit Documents or
any Hedging Agreement between any Credit Party and any Lender. The Agent may
make any payment hereby authorized in accordance with any bill, statement or
estimate procured from the appropriate public office or holder of the claim to
be discharged without inquiry into the accuracy of such bill, statement or
estimate or into the validity of any tax assessment, sale, forfeiture, tax lien,
title or claim except to the extent such payment is being contested in good
faith by a Pledgor in appropriate proceedings and against which adequate
reserves are being maintained in accordance with GAAP.
8. Events of Default. The occurrence of an Event of Default under the
Credit Agreement shall be an event of default hereunder (an "Event of Default").
9. Remedies.
(a) General Remedies. Upon the occurrence of an Event of
Default and during the continuation thereof, the Agent on behalf of the
Lenders and each of the Lenders shall have, in respect of the Pledged
Collateral of any Pledgor, in addition to the rights and remedies
provided herein, in the Credit Documents, in any Hedging Agreement
between any Credit Party and any Lender or by law, the rights and
remedies of a secured party under the UCC or any other applicable law.
(b) Sale of Pledged Collateral. Upon the occurrence of an Event
of Default and during the continuation thereof, without limiting the
generality of this Section and without
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notice, the Agent may, in its sole discretion, sell or otherwise
dispose of or realize upon the Pledged Collateral, or any part thereof,
in one or more parcels, at public or private sale, at any exchange or
broker's board or elsewhere, at such price or prices and on such other
terms as the Agent may deem commercially reasonable, for cash, credit
or for future delivery or otherwise in accordance with applicable law.
To the extent permitted by law, any Lender may in such event, bid for
the purchase of such securities. Each Pledgor agrees that, to the
extent notice of sale shall be required by law and has not been waived
by such Pledgor, any requirement of reasonable notice shall be met if
notice, specifying the place of any public sale or the time after which
any private sale is to be made, is personally served on or mailed,
postage prepaid, to such Pledgor, in accordance with the notice
provisions of Section 14.1 of the Credit Agreement at least ten (10)
days before the time of such sale. The Agent shall not be obligated to
make any sale of Pledged Collateral of such Pledgor regardless of
notice of sale having been given. The Agent may adjourn any public or
private sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice, be made at
the time and place to which it was so adjourned.
(c) Private Sale. Upon the occurrence of an Event of Default
and during the continuation thereof, the Pledgors recognize that the
Agent may deem it impracticable to effect a public sale of all or any
part of the Pledged Collateral and that the Agent may, therefore,
determine to make one or more private sales of any such Pledged
Collateral to a restricted group of purchasers who will be obligated to
agree, among other things, to acquire such Pledged Collateral for their
own account, for investment and not with a view to the distribution or
resale thereof. Each Pledgor acknowledges that any such private sale
may be at prices and on terms less favorable to the seller than the
prices and other terms which - might have been obtained - at a public
sale and, notwithstanding the foregoing, agrees that such private sale
shall be deemed to have been made in a commercially reasonable manner
and that the Agent shall have no obligation to delay sale of any such
Pledged Collateral for the period of time necessary to permit the
issuer of such Pledged Collateral to register such Pledged Collateral
for public sale under the Securities Act of 1933. Each Pledgor further
acknowledges and agrees that any offer to sell such Pledged Collateral
which has been (i) publicly advertised on a bona fide basis in a
newspaper or other publication of general circulation in the financial
community of Charlotte, North Carolina or New York, New York (to the
extent that such offer may be advertised without prior registration
under the Securities Act of 1933), or (ii) made privately in the manner
described above shall be deemed to involve a "public sale" under the
UCC, notwithstanding that such sale may not constitute a "public
offering" under the Securities Act of 1933, and the Agent may, in such
event, bid for the purchase of such Pledged Collateral.
(d) Retention of Pledged Collateral. In addition to the rights
and remedies hereunder, upon the occurrence of an Event of Default and
during the continuation thereof, the Agent may, after providing the
notices required by Section 9-620 of the UCC or otherwise complying with
the requirements of applicable law of the relevant jurisdiction, accept
or retain all or any portion of the Pledged Collateral in satisfaction
of the Pledgor Obligations. Unless and until the Agent shall have
provided such notices, however, the Agent shall not be deemed to have
retained any Pledged Collateral in satisfaction of any Pledgor
Obligations for any reason.
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(e) Deficiency. In the event that the proceeds of any sale,
collection or realization are insufficient to pay all amounts to which
the Agent or the Lenders are legally entitled, the Pledgors shall be
jointly and severally liable for the deficiency, together with interest
thereon at the default rate set forth in Section 4.2 of the Credit
Agreement, together with the costs of collection and the reasonable fees
of any attorneys employed by the Agent to collect such deficiency. Any
surplus remaining after the full payment and satisfaction of the Pledgor
Obligations shall be returned to the Pledgors or to whomsoever a court
of competent jurisdiction shall determine to be entitled thereto.
(f) Other Security. To the extent that any of the Pledgor
Obligations are now or hereafter secured by property other than the
Pledged Collateral (including, without limitation, real and other
personal property owned by a Pledgor), or by a guarantee, endorsement or
property of any other Person, then the Agent and the Lenders shall have
the right to proceed against such other property, guarantee or
endorsement upon the occurrence of any Event of Default, and the Agent
and the Lenders have the right, in their sole discretion, to determine
which rights, security, liens, security interests or remedies the Agent
and the Lenders shall at any time pursue, relinquish, subordinate,
modify or take with respect thereto, without in any way modifying or
affecting any of them or any of the Agent's and the Lenders' rights or
the Pledgor Obligations under this Pledge Agreement, under any other of
the Credit Documents or under any Hedging Agreement between any Credit
Party and any Lender.
(g) Personal Property Security Act ("PPSA"). In addition to,
and not in any way in limitation of any of the foregoing rights and
remedies, the Agent may exercise any and all remedies available to the
Agent under the PPSA (or similar local law) as in effect in Ontario and
any other applicable Canadian province.
10. Rights of the Agent.
(a) Power of Attorney. In addition to other powers of attorney
contained herein, each Pledgor hereby designates and appoints the Agent,
on behalf of the Lenders, and each of its designees or agents as
attorney-in-fact of such Pledgor, irrevocably and with power of
substitution, with authority to take any or all of the following actions
upon the occurrence and during the continuation of an Event of Default:
(i) to demand, collect, settle, compromise, adjust
and give discharges and releases concerning the Pledged
Collateral of such Pledgor, all as the Agent may reasonably
determine;
(ii) to commence and prosecute any actions at any
court for the purposes of collecting any of the Pledged
Collateral of such Pledgor and enforcing any other right in
respect thereof;
(iii) to defend, settle, adjust or compromise any
action, suit or proceeding brought with respect to the
Collateral and, in connection therewith, give such discharge
or release as the Agent may deem reasonably appropriate;
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(iv) to pay or discharge taxes, liens, security
interests, or other encumbrances levied or placed on or
threatened against the Pledged Collateral of such Pledgor;
(v) to direct any parties liable for any payment
under any of the Pledged Collateral to make payment of any and
all monies due and to become due thereunder directly to the
Agent or as the Agent shall direct;
(vi) to receive payment of and receipt for any and
all monies, claims, and other amounts due and to become due at
any time in respect of or arising out of any Pledged
Collateral of such Pledgor;
(vii) to sign and endorse any drafts, assignments,
proxies, stock powers, verifications, notices and other
documents relating to the Pledged Collateral of such Pledgor;
(viii) to execute and deliver all assignments,
conveyances, statements, financing statements, renewal
financing statements, pledge agreements, affidavits, notices
and other agreements, instruments and documents that the Agent
may determine necessary in order to perfect and maintain the
security interests and liens granted in this Pledge Agreement
and in order to fully consummate all of the transactions
contemplated herein;
(ix) to exchange any of the Pledged Collateral of
such Pledgor or other property upon any merger, consolidation,
reorganization, recapitalization or other readjustment of the
issuer thereof and, in connection therewith, deposit any of
the Pledged Collateral of such Pledgor with any committee,
depository, transfer agent, registrar or other designated
agency upon such terms as the Agent may determine;
(x) to vote for a shareholder, partner or member
resolution, or to sign an instrument in writing, sanctioning
the transfer of any or all of the Pledged Capital Stock of
such Pledgor into the name of the Agent or one or more of the
Lenders or into the name of any transferee to whom the Pledged
Capital Stock of such Pledgor or any part thereof may be sold
pursuant to Section 9 hereof; and
(xi) to do and perform all such other acts and things
as the Agent may reasonably deem to be necessary, proper or
convenient in connection with the Pledged Collateral of such
Pledgor.
This power of attorney is a power coupled with an interest and shall be
irrevocable (1) for so long as any of the Pledgor Obligations remain
outstanding, any Credit Document or any Hedging Agreement between any
Credit Party and any Lender is in effect or any Letter of Credit shall
remain outstanding and (ii) until all of the Commitments shall have been
terminated. The Agent shall be under no duty to exercise or withhold the
exercise of any of the rights, powers, privileges and options expressly
or implicitly granted to the Agent in this Pledge Agreement, and shall
not be liable for any failure to do so or any delay in doing so. The
Agent shall not be liable for any act or omission or for any error of
10
judgment or any mistake of fact or law in its individual capacity or its
capacity as attorney-in-fact except acts or omissions resulting from its
gross negligence or willful misconduct. This power of attorney is
conferred on the Agent solely to protect, preserve and realize upon its
security interest in the Pledged Collateral.
(b) Assignment by the Agent. The Agent may from time to time
assign the Pledgor Obligations or any portion thereof and/or the Pledged
Collateral or any portion thereof, and the assignee shall be entitled to
all of the rights and remedies of the Agent under this Pledge Agreement
in relation thereto.
(c) The Agent's Duty of Care. Other than the exercise of
reasonable care to ensure the safe custody of the Pledged Collateral
while being held by the Agent hereunder, the Agent shall have no duty or
liability to preserve rights pertaining thereto, it being understood and
agreed that Pledgors shall be responsible for preservation of all rights
in the Pledged Collateral of such Pledgor, and the Agent shall be
relieved of all responsibility for Pledged Collateral upon surrendering
it or tendering the surrender of it to the Pledgors. The Agent shall be
deemed to have exercised reasonable care in the custody and preservation
of the Pledged Collateral in its possession if such Pledged Collateral
is accorded treatment substantially equal to that which the Agent
accords its own property, which shall be no less than the treatment
employed by a reasonable and prudent agent in the industry, it being
understood that the Agent shall not have responsibility for (i)
ascertaining or taking action with respect to calls, conversions,
exchanges, maturities, tenders or other matters relating to any Pledged
Collateral, whether or not the Agent has or is deemed to have knowledge
of such matters; or (ii) taking any necessary steps to preserve rights
against any parties with respect to any Pledged Collateral.
(i) So long as no Event of Default shall have
occurred and be continuing, to the extent permitted by law,
each Pledgor may exercise any and all voting and other
consensual rights pertaining to the Pledged Collateral of such
Pledgor or any part thereof for any purpose not inconsistent
with the terms of this Pledge Agreement or the Credit
Agreement; and
(ii) Upon the occurrence and during the continuance
of an Event of Default, all rights of a Pledgor to exercise
the voting and other consensual rights which it would
otherwise be entitled to exercise pursuant to paragraph (i) of
this subsection (d) shall cease and all such rights shall
thereupon become vested in the Agent which shall then have the
sole right to exercise such voting and other consensual
rights.
(e) Dividend and Distribution Rights in Respect of the Pledged
Collateral.
(i) So long as no Event of Default shall have occurred
and be continuing and subject to Section 4(b) hereof, each
Pledgor may receive and retain any and all dividends (other
than stock or ownership interest dividends and other dividends
constituting Pledged Collateral which are addressed
hereinabove), distributions or interest paid in respect of the
Pledged Collateral to the extent they are allowed under the
Credit Agreement.
11
(ii) Upon the occurrence and during the continuation
of an Event of Default:
(A) all rights of a Pledgor to receive the
dividends, distributions and interest payments which
it would otherwise be authorized to receive and retain
pursuant to paragraph (i) of this subsection (e) shall
cease and all such rights shall thereupon be vested in
the Agent which shall then have the sole right to
receive and hold as Pledged Collateral such dividends,
distributions and interest payments; and
(B) all dividends, distributions and interest
payments which are received by a Pledgor contrary to
the provisions of clause (A) of this paragraph (ii)
shall be received in trust for the benefit of the
Agent, shall be segregated from other property or
funds of such Pledgor, and shall be forthwith paid
over to the Agent as Pledged Collateral in the exact
form received, to be held by the Agent as Pledged
Collateral and as further collateral security for the
Pledgor Obligations.
(f) Release of Pledged Collateral. The Agent may release any of
the Pledged Collateral from this Pledge Agreement or may substitute any
of the Pledged Collateral for other Pledged Collateral without
altering, varying or diminishing in any way the force, effect, lien,
pledge or security interest of this Pledge Agreement as to any Pledged
Collateral not expressly released or substituted, and this Pledge
Agreement shall continue as a first priority lien on all Pledged
Collateral not expressly released or substituted.
(g) Filing of Financing Statements. The Pledgors authorize the
Agent to file financing statements (including renewal statements and
in lieu statements) and PPSA registrations and amendments thereof and
supplements thereto with respect to the Pledged Collateral in such
form and in such filing offices as the Agent reasonably determines
appropriate to perfect the security interests of the Agent under this
Pledge Agreement. Any financing statement or PPSA registration filed
by the Agent may contain a general description of the Collateral
covered thereby, as permitted by the UCC and/or the PPSA.
11. Rights of Required Lenders. All rights of the Agent hereunder, if
not exercised by the Agent, may be exercised by the Required Lenders.
12. Application of Proceeds. Upon the occurrence and during the
continuation of an Event of Default, any payments in respect of the Pledgor
Obligations and any proceeds of any Pledged Collateral, when received by the
Agent or any of the Lenders in cash or its equivalent, will be applied in
reduction of the Pledgor Obligations in the order set forth in Section 4.7 of
the Credit Agreement, and each Pledgor irrevocably waives the right to direct
the application of such payments and proceeds and acknowledges and agrees that
the Agent shall have the continuing and exclusive right to apply and reapply any
and all such payments and proceeds in the Agent's sole discretion,
notwithstanding any entry to the contrary upon any of its books and records.
12
13. Costs of Counsel. If at any time hereafter, whether upon the
occurrence of an Event of Default or not, the Agent employs counsel or after the
occurrence and during the continuance of an Event of Default any Lender employs
counsel to prepare or consider amendments, waivers or consents with respect to
this Pledge Agreement, or to take action or make a response in or with respect
to any legal or arbitral proceeding relating to this Pledge Agreement or
relating to the Pledged Collateral, or to protect the Pledged Collateral or
exercise any rights or remedies under this Pledge Agreement or with respect to
the Pledged Collateral, then the Pledgors agree to promptly pay upon demand any
and all such reasonable costs and expenses of the Agent and the Lenders
including attorneys' fees and expenses, all of which costs and expenses shall
constitute Pledgor Obligations hereunder.
14. Continuing Agreement.
(a) This Pledge Agreement shall be a continuing agreement in
every respect and shall remain in full force and effect so long as any
of the Pledgor Obligations remain outstanding or any Credit Document
or Hedging Agreement between any Credit Party and any Lender is in
effect or any Letter of Credit shall remain outstanding, and until all
of the Commitments thereunder shall have terminated. Upon such payment
and termination, this Pledge Agreement shall be automatically
terminated and the Agent and the Lenders shall, upon the request and
at the expense of the Pledgors, forthwith release all of its liens and
security interests hereunder and shall execute and deliver all UCC
termination statements and/or other documents reasonably requested by
the Pledgors evidencing such termination. Notwithstanding the
foregoing all releases and indemnities provided hereunder shall
survive termination of this Pledge Agreement.
(b) This Pledge Agreement shall continue to be effective or be
automatically reinstated, as the case may be, if at any time payment,
in whole or in part, of any of the Pledgor Obligations is rescinded or
must otherwise be restored or returned by the Agent or any Lender as a
preference, fraudulent conveyance or otherwise under any bankruptcy,
insolvency or similar law, all as though such payment had not been
made; provided that in the event payment of all or any part of the
Pledgor Obligations is rescinded or must be restored or returned, all
reasonable costs arid expenses (including without limitation any
reasonable legal fees and disbursements) incurred by the Agent or any
Lender in defending and enforcing such reinstatement shall be deemed
to be included as a part of the Pledgor Obligations.
15. Amendments; Waivers; Modifications. This Pledge Agreement and the
provisions hereof may not be amended, waived, modified, changed, discharged or
terminated except as set forth in Section 14.6 of the Credit Agreement.
16. Successors in Interest. This Pledge Agreement shall create a
continuing security interest in the Pledged Collateral and shall be binding upon
each Pledgor, its successors and assigns and shall inure, together with the
rights and remedies of the Agent and the Lenders hereunder, to the benefit of
the Agent and the Lenders and their successors and permitted assigns; provided,
however, that none of the Pledgors may assign its rights or delegate its duties
hereunder without the prior written consent of each Lender or the Required
Lenders, as required by the Credit Agreement. To the fullest extent permitted by
law, each Pledgor hereby releases the Agent and each Lender, and its successors
and assigns, from any liability for any act or
13
omission relating to this Pledge Agreement or the Pledged Collateral, except for
any liability arising from the gross negligence or willful misconduct of the
Agent, or such Lender, or its officers, employees or agents.
17. Notices. All notices required or permitted to be given under this
Pledge Agreement shall be in conformance with Section 14.1 of the Credit
Agreement.
18. Counterparts. This Pledge Agreement may be executed in any number
of counterparts, each of which where so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Pledge Agreement to produce or
account for more than one such counterpart.
19. Headings. The headings of the sections and subsections hereof are
provided for convenience only and shall not in any way affect the meaning,
construction or interpretation of any provision of this Pledge Agreement.
20. Governing Law; Submission to Jurisdiction and Service of Process;
Arbitration; Waiver of Jury Trial. THIS PLEDGE AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH CAROLINA, WITHOUT
GIVING EFFECT TO THE CHOICE OF LAW PROVISIONS THEREOF. The terms of Sections
14.12, 14.13 and 14.14 of the Credit Agreement are incorporated herein by
reference, mutatis mutandis, and the parties hereto agree to such terms.
21. Severability. If any provision of this Pledge Agreement is
determined to be illegal, invalid or unenforceable, such provision shall be
fully severable and the remaining provisions shall remain in full force and
effect and shall be construed without giving effect to the illegal, invalid or
unenforceable provisions.
22. Entirety. This Pledge Agreement, the other Credit Documents and
any Hedging Agreement between any Credit Party and any Lender represent the
entire agreement of the parties hereto and thereto, and supersede all prior
agreements and understandings, oral or written, if any, including any commitment
letters or correspondence relating to this Pledge Agreement, the other Credit
Documents, any such Hedging Agreement or the transactions contemplated herein
and therein.
23. Survival. All representations and warranties of the Pledgors
hereunder shall survive the execution and delivery of this Pledge Agreement, the
other Credit Documents and any Hedging Agreement between any Credit Party and
any Lender, the delivery of the Notes and the making of the Loans and the
issuance of the Letters of Credit under the Credit Agreement.
24. Joint and Several Obligations of Pledgors.
(a) Each of the Pledgors is accepting joint and several
liability hereunder in consideration of the financial accommodation to
be provided by the Lenders under the Credit Agreement, for the mutual
benefit, directly and indirectly, of each of the Pledgors
14
and in consideration of the undertakings of each of the Pledgors to
accept joint and several liability for the obligations of each of
them.
(b) Each of the Pledgors, jointly and severally hereby
irrevocably and unconditionally accepts, not merely as a surety but
also as a co-debtor, joint and several liability with the other
Pledgors with respect to the payment and performance of all of the
Pledgor Obligations arising under this Pledge Agreement, the other
Credit Documents and any Hedging Agreement between any Credit Party
and any Lender, it being the intention of the parties hereto that all
the Pledgor Obligations shall be the joint and several obligations of
each of the Pledgors without preferences or distinction among them.
(c) Notwithstanding any provision to the contrary contained
herein or in any other of the Credit Documents, to the extent the
obligations of a Pledgor shall be adjudicated to be invalid or
unenforceable for any reason (including, without limitation, because
of any applicable state, provincial or federal law relating to
fraudulent conveyances or transfers) then the obligations of such
Pledgor hereunder shall be limited to the maximum amount that is
permissible under applicable law (whether state, provincial or federal
and including, without limitation, the Bankruptcy Code).
Each of the parties hereto has caused a counterpart of this Pledge
Agreement to be duly executed and delivered as of the date first above written.
PLEDGORS: WOLVERINE TUBE, INC.
By: /s/ James E. Deason
--------------------------------------
Name: James E. Deason
------------------------------------
Title: EVP, CFO & Secretary
-----------------------------------
TF INVESTOR, INC.
By: /s/ James E. Deason
--------------------------------------
Name: James E. Deason
------------------------------------
Title: VP & Treasurer
-----------------------------------
TUBE FORMING, L.P.
By: Tube Forming Holdings, Inc.
its General Partner
By: /s/ James E. Deason
--------------------------------
Name: James E. Deason
------------------------------
Title: VP, CFO & Treasurer
-----------------------------
15
WOLVERINE FINANCE COMPANY
By: /s/ James E. Deason
--------------------------------------
Name: James E. Deason
------------------------------------
Title: VP & Treasurer
-----------------------------------
STPC HOLDING, INC.
By: /s/ James E. Deason
--------------------------------------
Name: James E. Deason
------------------------------------
Title: VP & Treasurer
-----------------------------------
SMALL TUBE MANUFACTURING CORPORATION
By: /s/ James E. Deason
--------------------------------------
Name: James E. Deason
------------------------------------
Title: VP & Treasurer
-----------------------------------
WOLVERINE JOINING TECHNOLOGIES, INC.
By: /s/ James E. Deason
--------------------------------------
Name: James E. Deason
------------------------------------
Title: Vice President
-----------------------------------
WOLVERINE CHINA INVESTMENTS, LLC
By: Wolverine Tube, Inc.
its Managing Member
By: /s/ James E. Deason
--------------------------------
Name: James E. Deason
------------------------------
Title: EVP, CFO & Secretary
-----------------------------
Wolverine Tube, Inc.
Pledge Agreement
16
Accepted and agreed to as of the date first above written.
WACHOVIA BANK, N.A., as Agent
By: /s/ Laurie D. Galliano
--------------------------------------
Name: Laurie D. Galliano
------------------------------------
Title: Vice President
-----------------------------------
Wolverine Tube, Inc.
Pledge Agreement
17
Schedule 2(a)
to
Pledge Agreement
dated as of March 27, 2002
in favor of Wachovia Bank, N.A.
As Agent
PLEDGED STOCK
PLEDGOR: WOLVERINE TUBE, INC.
Number of Certificate Percentage Percentage
Name of Subsidiary Shares Number Ownership Pledged
- ------------------ ------ ------ --------- -------
1105836 Ontario Inc. 691 C-9 100% 65%
Wolverine Tube Asia, LTD 6,500 5 100% 65%
PLEDGOR: WOLVERINE CHINA INVESTMENTS, LLC
Number of Certificate Percentage Percentage
Name of Subsidiary Shares Number Ownership Pledged
- ------------------ ------ ------ --------- -------
Wolverine Tube (Shanghai) Co., Ltd. 100% 65%
Wolverine European Holdings B.V. uncertificated 100% 65%
PLEDGOR: WOLVERINE JOINING TECHNOLOGIES, INC.
Number of Certificate Percentage Percentage
Name of Subsidiary Shares Number Ownership Pledged
- ------------------ ------ ------ --------- -------
Wolverine Joining Technologies 650 A-2 100% 65%
(Canada) Inc.
18
Exhibit 4(a)
to
Pledge Agreement
dated as of March 27, 2002
in favor of Wachovia Bank, N.A.,
as Agent
Irrevocable Stock Power
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers to
the following shares of capital stock of ___________________, a ___________
corporation:
No. of Shares Certificate No.
------------- ---------------
and irrevocably appoints ________________________________ its agent and
attorney-in-fact to transfer all or any part of such capital stock and to take
all necessary and appropriate action to effect any such transfer. The agent and
attorney-in-fact may substitute and appoint one or more persons to act for him.
----------------------------------------,
a [corporation]
-------------
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
19